{"url":"https://etfiq.com/academy/advanced-portfolio-design/build-benchmark-and-defend/","section":"academy","title":"Capstone: build, benchmark and defend a portfolio | ETFIQ","description":"Over the 5 years to Oct 30, 2026, hypothetical VTI, VEA, BND and IAUM mix returned 8.16% a year, against 5.91% for Strategic 60. Free, on real ETF data.","as_of":"Nov 10, 2026","structured_data":[{"@type":"LearningResource","@id":"https://etfiq.com/academy/advanced-portfolio-design/build-benchmark-and-defend/#lesson","name":"Capstone: build, benchmark and defend a portfolio","description":"Over the 5 years to Oct 30, 2026, hypothetical VTI, VEA, BND and IAUM mix returned 8.16% a year, against 5.91% for Strategic 60.","url":"https://etfiq.com/academy/advanced-portfolio-design/build-benchmark-and-defend/","learningResourceType":"Lesson","teaches":"Building a mix, matching its benchmark, finding what drove the gap and arguing against your own result","educationalLevel":"Advanced","timeRequired":"PT8M","inLanguage":"en","isAccessibleForFree":true,"isPartOf":{"@type":"Course","@id":"https://etfiq.com/academy/advanced-portfolio-design/#course","name":"Advanced Portfolio Design","url":"https://etfiq.com/academy/advanced-portfolio-design/"},"position":5,"dateModified":"2026-11-10","author":{"@type":"Organization","name":"ETFIQ Research","url":"https://etfiq.com"},"publisher":{"@type":"Organization","name":"ETFIQ Research","url":"https://etfiq.com"}},{"@type":"FAQPage","@id":"https://etfiq.com/academy/advanced-portfolio-design/build-benchmark-and-defend/#check","mainEntity":[{"@type":"Question","name":"A mix with 78% stocks, looked through, beat Strategic 60 by 3 points a year. What is wrong with the claim?","acceptedAnswer":{"@type":"Answer","text":"It should be judged against Strategic 80, its own band. 78% sits in the 70% to 85% band, benchmarked to Strategic 80."}},{"@type":"Question","name":"Swapping a mix's 10% gold for bonds cuts its 5-year return from 8% to 6.5% a year, and the benchmark made 6%. How much of the 2-point lead came from gold?","acceptedAnswer":{"@type":"Answer","text":"1.5 points. 8 \u2212 6.5 = 1.5."}},{"@type":"Question","name":"Which line belongs in an honest defence?","acceptedAnswer":{"@type":"Answer","text":"\"It led by 2.25 points a year over five years, mostly from gold, chosen with hindsight.\". it gives the window, cause and caveat."}}]},{"@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"name":"ETFIQ","item":"https://etfiq.com/"},{"@type":"ListItem","position":2,"name":"Academy","item":"https://etfiq.com/academy/"},{"@type":"ListItem","position":3,"name":"Advanced Portfolio Design","item":"https://etfiq.com/academy/advanced-portfolio-design/"},{"@type":"ListItem","position":4,"name":"Capstone","item":"https://etfiq.com/academy/advanced-portfolio-design/build-benchmark-and-defend/"}]},{"@type":"WebPage","name":"Capstone: build, benchmark and defend a portfolio","description":"Over the 5 years to Oct 30, 2026, hypothetical VTI, VEA, BND and IAUM mix returned 8.16% a year, against 5.91% for Strategic 60. Free, on real ETF data.","url":"https://etfiq.com/academy/advanced-portfolio-design/build-benchmark-and-defend/","dateModified":"2026-11-10","isPartOf":{"@type":"WebSite","name":"ETFIQ","url":"https://etfiq.com"},"speakable":{"@type":"SpeakableSpecification","cssSelector":[".lede"]},"publisher":{"@id":"https://etfiq.com/#org"}}],"characters":6237,"truncated":false,"content":"ETFIQ / Academy / Advanced Portfolio Design / Capstone \n \n Capstone: build, benchmark and defend a portfolio\n Data as of Nov 10, 2026. Rebuilt every trading night.\n Over the 5 years to Oct 30, 2026 , hypothetical VTI, VEA, BND and IAUM mix returned 8.16% a year, against 5.91% for Strategic 60.\n Advanced Portfolio Design \u00b7 Lesson 5 of 5 1 2 3 4 5 \n Tap a window. See what $10,000 grew to in a hypothetical 45/15/30/10 mix and in its benchmark, Strategic 60. 1 year 3 years 5 years Amount (hypothetical) $10,000 Years 5 Mix yearly rate 8.16% Strategic 60 yearly rate 5.91% $10,000 after 5 years: Mix: 45% VTI, 15% VEA, 30% BND, 10% IAUM $14,802, Strategic 60 (benchmark) $13,326. Hypothetical amount and mix: today's weights on past prices, windows to Oct 30, 2026. IAUM began Jun 29, 2021, so no 10-year result exists. Step 1: build. Weights: 45% US stocks, 15% international stocks, 30% US bonds, 10% gold. The Model builder picks each cheapest broad fund: VTI, VEA, BND and IAUM . Weighted fee: about 0.03% , or $3.40 a year on $10,000, against 0.05% for the benchmark. Step 2: find the benchmark. Looking through to the stocks inside each fund, the mix holds 59.75% stocks. That is the Moderate band, so its benchmark is Strategic 60 : 60% VT (world stocks) and 40% US bonds. Step 3: every window. IAUM began trading Jun 29, 2021 , so the mix has 64 months of history. No 10-year result exists ( lesson 4 ). Step 4: what drove the gap? Over 60 months: Step 5: argue against yourself. Hindsight: would you have picked 10% gold in October 2021, before gold doubled? Window: the lead rests on five years and one metal's run. The committee on IAUM: only 5 of 12 seats can read a gold trust. The Bogle-style seat (low-cost broad funds) Challenges it as specialised; the Livermore-style seat (price trends) Challenges its trend. Have an answer for both. \n The question\n I've built a mix that beat its benchmark. How do I show it's sound, not just lucky timing?\n The idea\n A portfolio you can defend has three parts: Build it from stated rules: the weights, and how each fund was chosen.\n Benchmark it against the simple mix with the same stock share, on every window ( Intermediate lesson 7 ).\n Defend it: name what drove each gap, then argue against yourself like the committee's Skeptic .\n \n Quoting only the best window is a sales pitch, not a defence. \n Worked example\n The 5 steps beside the drawing at the top work this through on ETFIQ data. Point at a step to light the part of the drawing it describes.\n Returns run to Oct 30, 2026 ; fees and committee readings are as of Nov 10, 2026 . All returns are hypothetical . (An example, not a pick.)\n Window Mix, a year Strategic 60, a year Gap \n 1 year 7.88% 7.33% +0.55 \n 3 years 17.87% 15.21% +2.66 \n 5 years 8.16% 5.91% +2.25 \n Risk over 5 years: volatility 11.24% against 10.91% ; worst month-end fall \u221220.57% against \u221221.13% . (The benchmark page's \u221222.31% uses daily prices. Compare like with like.)\n IAUM (gold) returned +117.2% ; BND (bonds) \u22120.9% .\n Swap gold for bonds (45/15/40) and the mix returns 6.35% a year.\n So gold gave 8.16% \u2212 6.35% = 1.81 points of the 2.25 -point lead.\n The rest, about 0.44 points, mostly came from more US stocks than VT holds: VTI returned +68.2% against VT's +60.2% .\n A fair defence, in four sentences: \"My mix holds 59.75% stocks, so I judge it against Strategic 60. It led on every window, by 2.25 points a year over five years, at similar volatility and worst fall. Gold supplied most of that lead, chosen with hindsight. The record is 64 months and hypothetical.\"\n The common mistake\n \"It beat the benchmark, so the strategy works.\" The lead came mostly from one asset's run over five years. A defence names that.\n Check your understanding\n Pick an answer to see why. Two of three right passes the lesson.\n 1. A mix with 78% stocks, looked through, beat Strategic 60 by 3 points a year. What is wrong with the claim? A Nothing B It needs a longer name C It should be judged against Strategic 80, its own band D Strategic 60 is not hypothetical Answer: C. It should be judged against Strategic 80, its own band. 78% sits in the 70% to 85% band, benchmarked to Strategic 80. Not A: extra stocks are extra risk, not skill. 2. Swapping a mix's 10% gold for bonds cuts its 5-year return from 8% to 6.5% a year, and the benchmark made 6%. How much of the 2-point lead came from gold? A 0.5 points B 1.5 points C 2 points D 8 points Answer: B. 1.5 points. 8 \u2212 6.5 = 1.5. Not C: the mix without gold still led by 0.5 points. 3. Which line belongs in an honest defence? A \"It returned 17.87% a year.\" B \"It will keep beating the benchmark.\" C \"Every seat supports it.\" D \"It led by 2.25 points a year over five years, mostly from gold, chosen with hindsight.\" Answer: D. \"It led by 2.25 points a year over five years, mostly from gold, chosen with hindsight.\". it gives the window, cause and caveat. Not A: it quotes the best window alone. \n Takeaways\n Build from stated rules, benchmark by stock share, show every window. \n Find which choice drove the gap, and admit the hindsight. \n Write your defence as the Skeptic would attack it. \n Do it on ETFIQ\n Build your own mix and set it beside its benchmark \n Where to next\n Previous lesson: Back-testing honestly: windows, survivors, hindsight Advanced Portfolio Design: all lessons The explainer behind this lesson ETFIQ Academy How ETFIQ computes these numbers \n Cite this page. ETFIQ, Capstone: build, benchmark and defend a portfolio, data as of Nov 10, 2026. https://etfiq.com/academy/advanced-portfolio-design/build-benchmark-and-defend/ Free to use with attribution for data ETFIQ computes; issuer data stays under its owner's terms. The underlying files are at Open data .\n Other forms Plain ETFIQ, Capstone: build, benchmark and defend a portfolio, data as of Nov 10, 2026. https://etfiq.com/academy/advanced-portfolio-design/build-benchmark-and-defend/ APA ETFIQ. (Nov 10, 2026). Capstone: build, benchmark and defend a portfolio. Retrieved from https://etfiq.com/academy/advanced-portfolio-design/build-benchmark-and-defend/ Markdown [Capstone: build, benchmark and defend a portfolio (ETFIQ, Nov 10, 2026)](https://etfiq.com/academy/advanced-portfolio-design/build-benchmark-and-defend/)","source":"ETFIQ, independent ETF data. Recomputed nightly from public filings and prices.","publisher":{"@id":"https://etfiq.com/#org","name":"ETFIQ","url":"https://etfiq.com"},"license":"https://etfiq.com/license/","license_text":"Data ETFIQ computes is free to use with attribution: ETFIQ (etfiq.com). Issuer data stays under its owner's terms.","citation":"ETFIQ, Capstone: build, benchmark and defend a portfolio, data as of Nov 10, 2026. https://etfiq.com/academy/advanced-portfolio-design/build-benchmark-and-defend/"}