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The Golden Butterfly is one of the highest-rated lazy portfolios on the internet. It blends the safety of the Permanent Portfolio with extra equity exposure for growth. Tyler at PortfolioCharts created it after backtesting hundreds of allocations.
| Asset class | Allocation | Common ETF |
|---|---|---|
| Total US Stock Market | 20% | VTI |
| Small Cap Value | 20% | AVUV, VBR |
| Long-Term Treasury | 20% | TLT |
| Short-Term Treasury | 20% | SHY |
| Gold | 20% | IAU, GLD |
Five slices, equal weight, annual rebalancing. The "butterfly" name comes from the symmetric shape of the allocation.
Enter your holdings and see your portfolio as a pie chart.
Open Portfolio Visualizer →The Golden Butterfly is designed around three principles:
Historical backtests (1970-2023):
| Metric | Golden Butterfly | 60/40 portfolio | Total stock market |
|---|---|---|---|
| Real return | ~7.5% | ~6.2% | ~7.0% |
| Max drawdown | ~-11% | ~-27% | ~-51% |
| Standard deviation | ~8% | ~10% | ~16% |
| Worst year | ~-9% | ~-20% | ~-37% |
The Golden Butterfly produces returns competitive with a 100% stock portfolio but with about 1/4 the drawdown. The trade-off is some upside in roaring bull markets — when stocks return 30% in a year, this portfolio might return 12-15%.
Enter your holdings and see your portfolio as a pie chart.
Open Portfolio Visualizer →| Holding | Ticker | Amount | % |
|---|---|---|---|
| Total US Stock Market | VTI | $20,000 | 20% |
| Small Cap Value | AVUV | $20,000 | 20% |
| Long-Term Treasury | TLT | $20,000 | 20% |
| Short-Term Treasury | SHY | $20,000 | 20% |
| Gold ETF | IAU | $20,000 | 20% |
Five ETFs. Total expense ratio: ~0.13%. Maintenance: rebalance once a year. Total time per year: 20 minutes.
Academic research (Fama and French most famously) shows that small cap value stocks have historically outperformed the broader market by about 2-3% per year. This is called the "value premium" or "size premium."
The premium is real but not consistent year to year. Small cap value can underperform for 5-10 year stretches before catching up. The Golden Butterfly captures the long-term premium without betting everything on it.
Long bonds (20+ year Treasuries) are very sensitive to interest rates. They surge when rates fall (deflation, recession) and crash when rates rise. Short bonds (1-3 year Treasuries) are nearly immune to rate moves but yield less.
Holding both gives you upside when rates fall and protection when rates rise. The Permanent Portfolio uses cash (basically zero duration) for the bond protection slot. The Golden Butterfly uses short-term Treasuries which yield slightly more than cash with similar safety.
Use the portfolio visualizer to enter the five 20% slices. The pie chart will show the symmetric butterfly pattern. Compare against your current portfolio — most investors are far more concentrated in stocks alone.
The Golden Butterfly is not for everyone, but for investors who prioritize low drawdowns alongside reasonable returns, it is one of the strongest evidence-based portfolios you can build.