Marotta’s Gone-Fishing Portfolio: Review of 2023 Returns

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In the investing world, a gone-fishing portfolio is a simple asset allocation which performs well with only infrequent rebalancing.

We have been offering the Marotta’s Gone-Fishing Portfolio since 2012 as a free portfolio recommendation intended for people who are just getting started with investing. This portfolio has a limited number of investments with a balanced asset allocation that should do well with dampened volatility. Its primary appeal is simplicity, but a secondary virtue is that it avoids the worst mistakes of the financial services industry.

Last year, our 2023 Marotta’s Gone-Fishing Portfolio was a recommendation of 12 stock investments. It is a paired down version of our actual managed investing strategy, which has over 40 low-cost ETFs to target over 30 sectors.

This article is to report on the 2023 performance of those twelve stocks.

In this analysis, we have used returns ending December 31, 2023 as reported by Morningstar. For the portfolio, we have used the 100% Stock allocation invested at the start of the relevant period and then permitted to drift throughout the period.

Overall Returns

Ticker 3-Month 6-Month 9-Month 1-Year
iShares MSCI ACWI ACWI 11.24% 7.10% 13.87% 22.30%
All-Stock Default Gone-Fishing 10.50% 5.51% 9.53% 15.02%
All-Stock Default Vanguard Gone-Fishing 10.67% 5.90% 10.35% 15.87%

Without rebalancing, the all-stock Marotta 2023 Gone-Fishing Portfolio had a 1-year return of 15.02% and the all-stock Marotta Vanguard 2022 Gone-Fishing Portfolio had a 1-year return of 15.87%.

For comparison, iShares MSCI ACWI ETF (ACWI) saw a 2023 return of 22.30%. MSCI ACWI All Cap represents every stock in the world at exactly its cap weight. Any deviation from this index is a choice of investment strategies. Sometimes those choices will increase or reduce risk. They may also increase or reduce returns.

This past year, our choices decreased returns for both our default and Vanguard portfolios.

U.S. Stock Returns

Vanguard  |  Default
Ticker 3-Month 6-Month 9-Month 1-Year
Vanguard Total Stock Market VTI 12.15% 8.55% 17.61% 26.05%
Default Gone-Fishing U.S. Stock 11.79% 6.76% 13.15% 18.61%
Vanguard Gone-Fishing U.S. Stock 11.60% 6.51% 12.40% 16.90%
Vanguard Value 7.80% 0.00% VTV 9.14% 6.62% 10.43% 9.32%
SPDR® MSCI USA StrategicFactors 0.00% 7.80% QUS 10.50% 8.45% 15.87% 21.77%
Vanguard Mid-Cap Value 8.90% VOE 11.59% 6.18% 10.22% 9.86%
Vanguard Small-Cap Value 9.70% VBR 13.57% 10.11% 15.36% 16.01%
Vanguard Information Technology 10.60% VGT 16.85% 9.88% 26.23% 52.65%
Vanguard Health Care 9.50% VHT 7.02% 3.15% 6.29% 2.51%
Vanguard Consumer Staples 6.30% VDC 5.52% -0.31% 0.89% 2.37%
Vanguard Real Estate 4.00% VNQ 18.21% 8.07% 9.96% 11.79%

Note: We have included Vanguard Real Estate in our U.S. Stock reporting here for our Gone-Fishing portfolios. In our full Asset Allocation Design though, we typically section real estate ETFs into a separate asset class of Resource Stocks and report on it separately. That being said, this U.S. Stock portfolio is fairly compared to Vanguard Total Stock Market (VTI) because VTI includes U.S. REITs.

Without rebalancing, the U.S. Stock portion of the Marotta 2023 Gone-Fishing Portfolio had a 1-year return of 18.61% and the U.S. Stock portion of the Marotta Vanguard 2023 Gone-Fishing Portfolio had a 1-year return of 16.90%.

This can be compared to Vanguard Total Stock Market ETF (VTI), every stock in the U.S. exactly at its cap weight, which saw a 1-year return of 26.05%.

In our 2022 update, we discussed how those who concentrated their 2021 allocations in large-cap growth saw the best returns, but that for 2022 we thought investors may be glad to diversify elsewhere. In 2022, that turned out to be true with large-cap growth underperforming large-cap value. However, in 2023, large-cap growth saw the best returns again. In 2023, large-cap growth fund Vanguard S&P 500 (VOO) saw a one-year return of 26.32% compared to the value-tilt funds of Vanguard Value (VTV) which posted a 9.32% return and SPDR® MSCI USA StrategicFactors (QUS) which posted a 21.77% return.

Looking deeper, most of the large-cap growth return was driven by Vanguard Information Technology, which posted a return of 52.65% for the one year.

In our default 2022 and 2023 Marotta’s Gone-Fishing Portfolio and in our managed portfolios, we showed preference to QUS over VTV so as to make only half a mistake. In 2022, VTV would have been the better choice. In 2023, QUS was the better choice. This flip flopping makes us thankful we made only half a mistake.

Foreign Returns

Vanguard  |  Default
Ticker 3-Month 6-Month 9-Month 1-Year
iShares MSCI ACWI ex US ACWX 10.14% 5.19% 7.91% 15.67%
Full Freedom Investing Strategy 11.45% 6.22% 7.53% 14.40%
Default Gone-Fishing Foreign Stock 8.80% 3.87% 4.76% 10.31%
Vanguard Gone-Fishing Foreign Stock 9.44% 5.11% 7.66% 14.50%
Franklin FTSE Switzerland 0.00% 6.50% FLSW 11.05% 4.54% 8.74% 16.78%
iShares MSCI Singapore 0.00% 6.50% EWS 5.01% 4.11% 0.66% 6.23%
iShares MSCI Denmark 0.00% 6.50% EDEN 11.92% 5.30% 7.95% 17.99%
iShares MSCI New Zealand 0.00% 6.50% ENZL 11.77% 1.07% 0.14% 2.99%
Vanguard FTSE Emerging Markets 17.10% 17.20% VWO 7.08% 4.05% 5.35% 9.27%
Vanguard FTSE Developed Markets 26.10% 0.00% VEA 10.99% 5.80% 9.18% 17.94%

Without rebalancing, the Foreign Stock portion of the Marotta 2023 Gone-Fishing Portfolio had a return of 10.31% and the Foreign Stock portion of the Marotta Vanguard 2023 Gone-Fishing Portfolio had a return of 14.50%.

These returns can be compared to iShares MSCI ACWI ex US ETF (ACWX), every stock in the foreign world exactly at its cap weight, which saw a 1-year return of 15.67%.

It can also be compared to our full Freedom Investing strategy (a different model portfolio which represents our static targets), which would have had a 1-year return of 14.40%. Our Freedom Investing Strategy outperformed the Default Gone-Fishing Portfolio thanks to the addition of countries like Austria, Ireland, Netherlands, and Sweden which posted returns of 20.65%, 35.12%, 22.10%, and 25.10% respectively.

However, our full Freedom Investing strategy underperformed the Vanguard Gone-Fishing Portfolio because its near equal weight meant we had a higher allocation to Finland, New Zealand, Norway, and Singapore which posted returns of -0.10%, 2.99%, 2.98%, and 6.23% respectively.

Reminder: Stay the Course

U.S. Technology stocks dominated the returns of 2023. This has meant that any investor with more Technology exposure is celebrating while those with less exposure appear to be lagging behind. Amidst this season, it is easy for investors with brilliant asset allocations to be stricken with doubt.

To help combat this normal feeling, the question to ask is: Do I want to have an asset allocation that has more Technology exposure? U.S. Technology has done very well recently. It also currently appears overvalued. We have no crystal ball over here at Marotta. U.S. Technology could go up, down, or be flat in the coming year. However, the worst reason to buy more of something is because it has done well recently.

Instead, we strive to utilize a portfolio strategy that does not require market timing to be successful. We think the contrarian effect of rebalancing on a historically justifiable portfolio gives the best chance of weathering the market ups and downs.

For this reason, our advice is to stay the course. It is always a good time to have a balanced portfolio.

Photo by KAL VISUALS on Unsplash. Returns data gathered from Morningstar Advisor Workstation.

Follow Megan Russell:

Chief Operating Officer, CFP®, APMA®

Megan Russell has worked with Marotta Wealth Management most of her life. She loves to find ways to make the complexities of financial planning accessible to everyone. She is the author of over 800 financial articles and is known for her expertise on tax planning.