Golden Butterfly
Allocate 20% to SPY (S&P 500). Allocate 20% to IWN (Russell 2000 Value). Current signal: Static. Backtest max drawdown: -19.3%.
Current allocation
Golden Butterfly
- Holding period
- Data cutoff
- Next review
Based on research by Tyler (Portfolio Charts) · Tyler. The Golden Butterfly Portfolio. Portfolio ChartsPublished Apr 18, 2016staticall-weatherBestFolio's independent implementation, not affiliated with or endorsed by the original author.
About this Strategy
The Golden Butterfly portfolio was created by Tyler at Portfolio Charts as an evolution of Harry Browne's Permanent Portfolio. It keeps the four pillars but replaces 20% of the broad stock allocation with small-cap value, adding a factor premium backed by the Fama-French size and value research. Five equal 20% slices: SPY, IWN (small-cap value), TLT, SHY, and GLD.
Strategy Rules
- 1Allocate 20% to SPY (S&P 500)
- 2Allocate 20% to IWN (Russell 2000 Value)
- 3Allocate 20% to TLT (20+ Year Treasury Bonds)
- 4Allocate 20% to SHY (1-3 Year Treasury Bonds)
- 5Allocate 20% to GLD (Gold)
- 6Rebalance annually or when drift exceeds threshold
Asset Universe
5 instruments this strategy can hold
Key Differentiators
- Type
- Fixed / Strategic
- Frequency
- annual
- Next Rebalance
- Jan 409:30 ET (94d)
- Variants
- 1
- Risk Category
- moderate
- Regime
- Static
- Signal Date
- 2026-10-01
- Tags
- static, all-weather
- Type
- Fixed/Strategic Asset Allocation
- Trading Frequency
- Annual or on-drift rebalancing
- Number Of Holdings
- 5 ETFs
- Equity Allocation
- 40% (20% large-cap + 20% small-cap value)
- Bond Allocation
- 40% (20% long-term + 20% short-term)
- Gold Allocation
- 20%
- Philosophy
- Equal-weight all-weather with value factor tilt
- Risk Level
- Moderate
Asset Classes
Strategy & methodology
Allocate 20% to SPY (S&P 500); Allocate 20% to IWN (Russell 2000 Value); Allocate 20% to TLT (20+ Year Treasury Bonds); Allocate 20% to SHY (1-3 Year Treasury Bonds); Allocate 20% to GLD (Gold); Rebalance annually or when drift exceeds…
- Strategy type:
- Fixed allocation
- Rebalance frequency:
- Annual
- Original publication:
- 2016-04-18; results after that are out-of-sample for the original research. All results are backtest simulations.
- Data through:
- Backtest data through 2026-10-01. Latest signal 2026-10-01.
Simulated history
Stand-in funds and until when (4)
- TLT: VUSTX before Jul 26, 2002
- SHY: VFISX before Jul 26, 2002
- IWN: DFSVX before Jul 28, 2000
- SPY: VFINX before Jan 29, 1993
Before these dates the backtest uses a stand-in, not the fund itself, so the results over those stretches show how the rules would have behaved, not what the fund returned.
Research data and disclosures
Allocate 20% to SPY (S&P 500). Allocate 20% to IWN (Russell 2000 Value). Current signal: Static. Backtest max drawdown: -19.3%. This is a fixed-allocation portfolio. BestFolio supplies the public rule or approach, current signal and allocation, and interactive backtest views on this page. Users review the published signal and place any resulting trades in their own brokerage. Displayed returns remain hypothetical and do not represent a customer's brokerage record. The facts above show how current the data is.
- BestFolio supplies
- The annual signal email and this strategy page.
- Customer action
- Place any required trades in your own brokerage at the next open on Jan 4, 2027. BestFolio does not execute orders.
- Costs and exclusions
- Backtests are net of a modeled one-way transaction cost (10 bps, scaled up to 3x under stress); taxes, fund-expense drift, or market impact are not modeled. No tax, no slippage beyond the stated cost. Methodology limitations
- Freshness
- Signal data cutoff Oct 1, 2026 close.
- Next expected action
- Next review Jan 3, 2028 at the open (09:30 ET). Review the published signal before placing any trade.
Published result: Engine drift-until-flip-v1, data version d3dd925f, published 2026-10-01
Is Golden Butterfly still working in 2026?
Golden Butterfly returned 7.61% over the trailing 12 months and 53.71% over 36 months through 2026-10-01, compared with a full-backtest annualized return of 8.28%. Its full-backtest maximum drawdown was -19.30%. The full sample contains 9861 daily NAV observations from 1987-12-31. These are model results, not investor account returns or a promise. As of 2026-10-01 it is -4.88% below its high-water mark of 2026-08-25, 37 days ago, and its longest run below a previous high was 2.5 years. Recent returns do not establish that the strategy will keep working.
| Period | Return | CAGR | Max drawdown | Observations | Dates |
|---|---|---|---|---|---|
| Trailing 12 months | 7.61% | Not annualized | -7.09% | 252 | 2025-10-01 to 2026-10-01 |
| Trailing 36 months | 53.71% | Not annualized | -7.11% | 754 | 2023-09-29 to 2026-10-01 |
| Full backtest | 2081.93% | 8.28% | -19.30% | 9861 | 1987-12-31 to 2026-10-01 |
Last verified
Common questions about these results
Are these live investor returns?
No. These are the latest model NAV results from the published backtest. A recent date alone does not make a result an independently observed live record. Investor costs, taxes and execution can differ.
Why can a strategy lag for a year?
A tactical model can hold defensive assets during a rally or change positions during reversals. A short window can differ substantially from its full history. Compare cumulative returns over matching dates and inspect drawdowns as well.
How long has it spent below a previous high?
Its last high-water mark was 2026-08-25, 37 days before 2026-10-01, and it is -4.88% below that level now. The longest run below a previous high in the full backtest was 2.5 years. Recovering from a drawdown can take years, and a strong trailing return does not mean a past high has been regained.
Where can I check the signals behind these results?
The Signals tab on this page lists each dated model decision for the selected variant; for Pro strategies they are visible to Pro members. The methodology page explains the backtest assumptions.
Golden Butterfly at a glance
Golden Butterfly is a fixed-allocation portfolio by Tyler (Portfolio Charts) across US Equity, US Small-Cap Value, Long-Term Treasuries, Short-Term Treasuries, rebalanced annual. Backtested 1987-12-31 to 2026-10-01 (38.8 years): 8.3% CAGR, 1.13 Sharpe, -19.3% max drawdown, 7.6% volatility.
- Type
- Fixed Allocation
- Author
- Tyler (Portfolio Charts)
- Rebalancing
- Annual
- Risk
- Moderate
- Period
- 1987-12-31 to 2026-10-01
- CAGR
- 8.3%
- Sharpe
- 1.13
- Max Drawdown
- -19.3%
- Volatility
- 7.6%
Golden Butterfly — Fixed Allocation Portfolio
The Golden Butterfly portfolio was created by Tyler at Portfolio Charts as an evolution of Harry Browne's Permanent Portfolio. It keeps the four pillars but replaces 20% of the broad stock allocation with small-cap value, adding a factor premium backed by the Fama-French size and value research. Five equal 20% slices: SPY, IWN (small-cap value), TLT, SHY, and GLD.
Golden Butterfly: frequently asked questions
- What is Golden Butterfly?
- Five equal 20% slices: total market, small-cap value, long bonds, short bonds, and gold. Exceptional risk-adjusted returns.
- Who created the Golden Butterfly strategy?
- Golden Butterfly was developed by Tyler (Portfolio Charts). It is based on Tyler. The Golden Butterfly Portfolio. Portfolio Charts.
- What is the historical return and maximum drawdown of Golden Butterfly?
- Backtested from 1987-12-31 to 2026-10-01, Golden Butterfly returned 8.3% CAGR with a -19.3% maximum drawdown and a Sharpe ratio of 1.13. Past performance does not guarantee future results.
- How often is Golden Butterfly rebalanced?
- Golden Butterfly is rebalanced annual. BestFolio publishes the updated allocation signal each period.
- Is Golden Butterfly a fixed or tactical strategy?
- Golden Butterfly is a fixed-allocation (strategic) portfolio: it holds a set allocation and rebalances on schedule rather than rotating based on market signals.
Backtest Performance (1987-12-31 to 2026-10-01)
| Metric | Golden Butterfly |
|---|---|
| CAGR | 8.3% |
| Max Drawdown | -19.3% |
| Sharpe | 1.13 |
| Sortino | 1.86 |
| Volatility | 7.6% |
| Calmar | 0.43 |
| Total Return | 2081.9% |
| Backtest Period | 38.8 years |
Every rebalance fills at the signal-day close, net of modeled transaction costs. Followers trade at the next open; the delayed-close line in the Rebalance Frequency Sensitivity card shows the effect of trading one session later. Execution assumption
Strategy Details
- Type
- Fixed / Strategic
- Rebalancing
- annual
- Risk Level
- moderate
- Variants
- 1
- Author
- Tyler (Portfolio Charts)
- Source
- Tyler. The Golden Butterfly Portfolio. Portfolio Charts
Asset Classes
- US Equity
- US Small-Cap Value
- Long-Term Treasuries
- Short-Term Treasuries
- Gold
Categories
Further reading
Holding Golden Butterfly alongside another strategy? Use the free portfolio overlap calculator to see how much of the two portfolios actually differs.
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