Golden Butterfly Portfolio: backtest, returns and drawdowns
A variation on the Permanent Portfolio that adds small-cap value stocks for more growth.
Data updated October 2026
Created by: Tyler (Portfolio Charts)
Allocation
| Asset class | ETF used in the backtest | Weight |
|---|---|---|
| US total stock market | VTI | 20% |
| US small-cap value | IJS | 20% |
| Long-term US Treasuries | TLT | 20% |
| Short-term US Treasuries | SHY | 20% |
| Gold | GLD | 20% |
From June 2020 to October 2026 the Golden Butterfly Portfolio returned 8.4% a year on average, with annual volatility of 9.9%. Its deepest fall was 19.5%, from November 2021 to October 2022, recovered in about 32 months.
Its best year was 2025 (+19.3%) and its worst 2022 (−13.3%).
Over the same period 100% US stocks returned 16.8% a year with a maximum fall of 25.4%.
Key figures
- Annual return (CAGR)
- +8.4%
- Annual volatility
- 9.9%
- Maximum drawdown
- −19.5%
- Recovery time
- 32 months
- Sharpe
- 0.58
- Sortino
- 0.83
- Worst year
- 2022: −13.3%
- Positive years
- 4/5
Growth of $10,000
Drawdowns
Returns by calendar year
| Year | Golden Butterfly Portfolio | 60/40 Portfolio | 100% Stocks |
|---|---|---|---|
| 2026(partial) | +3.9% | +8.0% | +14.7% |
| 2025 | +19.3% | +13.1% | +17.1% |
| 2024 | +10.7% | +14.8% | +23.8% |
| 2023 | +12.1% | +17.9% | +26.1% |
| 2022 | −13.4% | −17.0% | −19.5% |
| 2021 | +9.3% | +14.6% | +25.7% |
| 2020(partial) | +14.2% | +16.5% | +26.4% |
How it works
Five equal slices: total market and small-cap value stocks, long and short Treasuries, and gold.
Backtest with total-return ETF prices (dividends reinvested), rebalanced to target weights on the first trading day of each year. No fees, taxes or currency effects; first and last years are partial. Past results do not predict future returns.
Questions
What is the Golden Butterfly Portfolio?
A variation on the Permanent Portfolio that adds small-cap value stocks for more growth. Allocation: 20% us total stock market, 20% us small-cap value, 20% long-term us treasuries, 20% short-term us treasuries, 20% gold. Created by: Tyler (Portfolio Charts).
What is the Golden Butterfly Portfolio return?
In the backtest from June 2020 to October 2026 it returned 8.4% a year on average, with a maximum drawdown of 19.5%. US dollars, before fees and taxes.
How often should it be rebalanced?
The backtest rebalances once a year back to the target weights. Rebalancing more often changes little and adds costs; some investors rebalance only when a weight drifts beyond a threshold.
What was the worst drawdown of the Golden Butterfly Portfolio?
19.5%, from November 2021 to October 2022; it took about 32 months to get back to the previous high.
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- Versione italiana
Source: MarketStack end-of-day prices. Historical and educational content: not a forecast and not investment advice. MEDGE Capital does not recommend buying or selling any instrument. Risk disclaimer.