GN 🌚 👋

As requested in last week’s survey we’re going to talk shop today.

The Autonomy Model Portfolio. Spooky stuff, I know.

Our model portfolio is a community effort. A culmination of ideas from us, trusted advisors, readers, friends the great digital highway, and the electric streets of New York. This is not financial advice.

Here’s the mandate 🤲🏼

Uh, what’s a mandate?

In the investing world, a mandate is the strategy and goal of an investment portfolio. Not all portfolios are created equal. A portfolio’s mandate dictates the expected outcome and behavior of the underlying assets.

Some portfolio strategies are built to act as insurance policies, others are designed to minimize risk or yield a specific return over time.

The Autonomy Core Portfolio mandate:

The strategy is based on a macroeconomic and geopolitical outlook overlayed onto companies I believe to be out-performers based on superior product/service, market position, and corporate strategy.

The portfolio contains ETFs that are not individuals stocks as way to a gain exposure to other asset classes and regions such as fixed-income (UST) and DTH (European High-Dividend ETF) while retaining liquidity.

As far as tactics, the idea of the Core Portfolio is to be long-only, meaning the PM (portfolio manager) will only focus on buying the right stuff in order to generate return over the medium and long term.

As far as weight I’m keeping the positions in the portfolio equal weight for now. If we make changes to this portfolio it will likely come through changes to weights.

How do you determine whether the portfolio is good or bad?

Is it just about the money?

Benchmarks. Benchmarks are important because they give investors a point of comparison. Returns and performance are relative. If the benchmark (in our case, the S&P 500 Index) is down 10% and your portfolio is only down 5% you are beating the market and producing alpha.

Alpha is the difference between your portfolio and the benchmark. If the market is down 10% but you are down 2% you’re actually doing great, outperforming the market by 8%. On the other hand if the benchmark is up 10% and your portfolio is only up 8% you’re actually doing poorly with a negative alpha of 2%.

Note* it is very, very difficult to beat benchmarks. It is notoriously difficult to beat US equity indices.

How’s it going?

Since the beginning of 2023 the overall performance has been outstanding.

Year-to-date 2023: Autonomy +13.8% vs S&P 500 +8.64%

That’s an extra 5.2% of return from a free newsletter.

1-Month: 1.12% alpha

If you’d like to follow the portfolio share Autonomy with 3 friends and we’ll grant you access. For more analysis, updates, and content jump into our Telegram. We’re only accepting about 20 more people into the channel for now.

Have a great evening everyone!