# Capstone: build, benchmark and defend a portfolio

> 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.

Data as of Nov 10, 2026. Rebuilt every trading night.

## Capstone: build, benchmark and defend a portfolio

Data as of Nov 10, 2026. Rebuilt every trading night.

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.

Advanced Portfolio Design · Lesson 5 of 5 1 2 3 4 5

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.

### The question

I've built a mix that beat its benchmark. How do I show it's sound, not just lucky timing?

### The idea

- A portfolio you can defend has three parts: - Build it from stated rules: the weights, and how each fund was chosen.

- Benchmark it against the simple mix with the same stock share, on every window ( Intermediate lesson 7 ).

- Defend it: name what drove each gap, then argue against yourself like the committee's Skeptic .

- Quoting only the best window is a sales pitch, not a defence.

### Worked example

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.

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.)

| Window | Mix, a year | Strategic 60, a year | Gap |
| --- | --- | --- | --- |
| 1 year | 7.88% | 7.33% | +0.55 |
| 3 years | 17.87% | 15.21% | +2.66 |
| 5 years | 8.16% | 5.91% | +2.25 |

Risk over 5 years: volatility 11.24% against 10.91% ; worst month-end fall −20.57% against −21.13% . (The benchmark page's −22.31% uses daily prices. Compare like with like.)

- IAUM (gold) returned +117.2% ; BND (bonds) −0.9% .

- Swap gold for bonds (45/15/40) and the mix returns 6.35% a year.

- So gold gave 8.16% − 6.35% = 1.81 points of the 2.25 -point lead.

- The rest, about 0.44 points, mostly came from more US stocks than VT holds: VTI returned +68.2% against VT's +60.2% .

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."

### The common mistake

"It beat the benchmark, so the strategy works." The lead came mostly from one asset's run over five years. A defence names that.

### Check your understanding

Pick an answer to see why. Two of three right passes the lesson.

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 − 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.

### Takeaways

- Build from stated rules, benchmark by stock share, show every window.

- Find which choice drove the gap, and admit the hindsight.

- Write your defence as the Skeptic would attack it.

### Do it on ETFIQ

Build your own mix and set it beside its benchmark

### Where to next

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Source: ETFIQ, independent ETF data. Recomputed nightly from public filings and prices.
Cite: 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/
Licence: https://etfiq.com/license/ Data ETFIQ computes is free to use with attribution: ETFIQ (etfiq.com). Issuer data stays under its owner's terms.
HTML: https://etfiq.com/academy/advanced-portfolio-design/build-benchmark-and-defend/