Dynamic Allocation Portfolio Update – May 2015

Jun. 16, 2015 9:52 PM ETVXX, XIV, SPY, TLT, SPXL, SVXY
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Contributor Since 2014

A father-son team sets out to help the eight year old (now nine year old) son achieving his financial goals. We established an portfolio using $1000 the little guy saved during the past three years. We use a dynamic asset allocation strategy that allocates ETF holdings between equity and bond. The little guy will publish his holdings and performance monthly. He is helping with gain/loss calculations and will participate in the investing decision making when he turns 10.

May was almost a rerun of April for our dynamic allocation portfolio. The portfolio had a nice 6.4% gain during the month. Same as in April, the gain was driven by 1.3% increase of the S&P500 and steep contango of VIX front month and second month futures (averaging ~8% for the month). The XIV component returned 13.2% while the SPXL component returned 3.4% for the month. Since inception in December 2015, the portfolio has returned 5.9% comparing to the 1.8% gain of SPY during the same period. If we exclude the 6% drag of portfolio return due to trading cost ($60 trading commissions for a $1000 portfolio), the total should have been ~12% since December.

There was no trade for the portfolio during the month.

 

Holding 1

Holding 2

     

Date

ETP1

Share1

Buy price1

Current price1

ETP2

Share2

Buy price2

Current price2

Cash

Account value

Gain/Loss since inception

4/30/2015

SPXL

7

89.23

90.76

XIV

8

28.57

39.92

40.73

995.41

-0.5%

5/29/2015

SPXL

7

89.23

93.86

XIV

8

28.57

45.19

40.73

1059.27

5.9%

Disclosure: The author is long XIV, SVXY, SPXL.

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