Diversification Strategy
Risk Management Through Ethical Fund Selection
Our Diversification Strategy reduces risk through carefully selected ethical funds across multiple asset classes. Through 6-10 fund positions, we focus on reducing overall portfolio risk while maintaining ethical alignment.
Target: Investors managing retirement sequence risk or preferring broader market exposure with ethical alignment
Strategy Overview
- 6-10 Fund Holdings - Diversified across asset classes (10-20% each)
- Risk Management - Portfolio risk reduction
- Global Exposure - Broad market diversification
- Lower Volatility - Reduced concentration risk
Performance Summary
Monthly Performance History
| Month/Year | Diversification Strategy | Benchmark | Excess Return |
|---|---|---|---|
| 2024 | |||
| January 2024 | -0.83% | +0.34% | -1.17% |
| February 2024 | +0.94% | +3.36% | -2.42% |
| March 2024 | +1.82% | +2.22% | -0.40% |
| April 2024 | -4.55% | -3.27% | -1.28% |
| May 2024 | +5.69% | +4.75% | +0.94% |
| June 2024 | +0.41% | +2.02% | -1.61% |
| July 2024 | +2.47% | +1.39% | +1.08% |
| August 2024 | +4.56% | +4.29% | +0.27% |
| September 2024 | +2.34% | +2.19% | +0.15% |
| October 2024 | -3.02% | -2.17% | -0.85% |
| November 2024 | +4.78% | +3.94% | +0.84% |
| December 2024 | -4.53% | -2.57% | -1.96% |
| 2025 | |||
| January 2025 | +3.31% | +3.28% | +0.03% |
| February 2025 | -1.16% | -0.35% | -0.81% |
| March 2025 | -2.80% | -3.81% | +1.01% |
| April 2025 | +0.77% | +0.76% | +0.01% |
| May 2025 | +5.55% | +5.71% | -0.16% |
| June 2025 | +3.05% | +4.64% | -1.59% |
| July 2025 | +1.56% | +1.02% | +0.54% |
| August 2025 | +2.32% | +2.68% | -0.36% |
Strategy TWR = Time-Weighted Return. Benchmark = MSCI ACWI (All Country World Index)
Performance Analysis
Portfolio Composition
Investment Verticals
- Traditional Stock: 34.5% | Core equity exposure across markets
- Strategic Overweight: 28.3% | Targeted regional opportunities
- Alternatives: 17.7% | Closed-end funds and unique strategies
- Emerging Markets Stock: 10.6% | Developing market exposure
- Tail Risk Hedge: 8.8% | Portfolio downside protection
Geographic Distribution
- Global Strategies: 26.5% | Multi-market and hedging funds
- US Market: 21.2% | Domestic equity exposure
- Japan Focus: 17.7% | Strategic Japan allocation
- International Developed: 13.3% | Non-US developed markets
- Emerging Markets: 10.6% | Broad emerging market exposure
- India Focus: 10.6% | Strategic India small-cap allocation
Portfolio Characteristics
- Holdings: 8 specialized funds
- Portfolio Yield: 3.2% weighted average
- Largest Position: 17.7% (strategic allocation)
- Position Range: 8.8% - 17.7%
- Fund Types: ETFs and mutual funds
- Strategic Focus: 62.8% in targeted strategies
- Risk Management: Tail risk hedging included
- Global Exposure: 5 different regional focuses
Ethical Implementation
Fund Screening Impact
Our diversification strategy excludes approximately 150 ESG/sustainable funds that donβt meet our ethical criteria - about 73% of available sustainable fund options due to incomplete screening.
- Product-Based: Funds with fossil fuel, weapons, or tobacco holdings
- Conduct-Based: Funds allowing human rights violators or environmental destroyers
- Strategic Commitments: Funds with Israeli apartheid supporters or petrochemical exposure
Investment Process
Fund Selection Criteria
- β
Ethical Screening - Fund holdings must pass our complete screening
- π Diversification - Broad exposure within asset class
- π° Cost Efficiency - Low expense ratios and fees
- π’ Fund Quality - Experienced management and stable operations
- π― Strategic Fit - Alignment with overall portfolio objectives
- π Performance - Consistent risk-adjusted returns
Risk Considerations
Diversification Philosophy
Multi-Asset Approach
We combine multiple asset classes to reduce portfolio volatility and manage sequence risk:
- Equity Diversification - Global exposure across developed and emerging markets
- Fixed Income Balance - Government and corporate bonds for stability
- Alternative Assets - REITs and commodities for inflation protection
- Currency Hedging - Selective hedging of foreign currency exposure
Sequence Risk Management
Particularly important for investors approaching or in retirement:
- Glide Path Flexibility - Asset allocation can adjust with life stage
- Withdrawal Strategy - Structured approach for retirement income
- Market Timing Buffer - Multiple asset classes reduce timing sensitivity
Tax Efficiency
Fund Structure Benefits
- Tax-Efficient Funds - Focus on index funds and tax-managed strategies
- Asset Location - Strategic placement across taxable and tax-deferred accounts
- Rebalancing Strategy - Tax-aware rebalancing when possible
- Loss Harvesting - Opportunities through fund switches when appropriate
Suitability Assessment
β Appropriate For:
- Investors managing sequence of returns risk
- Those preferring broad diversification over concentration
- Risk-averse investors comfortable with moderate returns
- Values-driven investors wanting ethical exposure across asset classes
β May Not Be Suitable For:
- High-conviction investors preferring concentrated positions
- Those seeking maximum growth potential
- Investors comfortable with high volatility
- Those preferring direct stock ownership over funds
Get Started
All investments involve risk of loss, including loss of principal. Past performance does not guarantee future results. ESG investing may limit investment opportunities and affect performance relative to strategies that do not use such criteria. This information is not intended as investment advice and should not be used as the sole basis for investment decisions.
Invest Vegan LLC DBA Ethical Capital is a Utah-registered investment adviser (CRD #316032). Registration does not imply a certain level of skill or training. All investing involves risk and potential loss of principal.