Harry Browne's Permanent Portfolio, which allocates equal portions to stocks, long-dated bonds, gold and cash and rebalances annually, produced a cumulative return of 234% from January 2007 to June 2026 in a European-adapted back-test by JustETF. That compares with 434% for a 100% equity portfolio and 279% for a traditional 60% stocks and 40% bonds portfolio.
The strategy's annualised return was around 6.4%, versus 9% for equities and 7.1% for the 60/40 portfolio. However, volatility was just 6.3%, compared with 8.6% for the 60/40 portfolio and 13.5% for the equity portfolio.
In 2008, when equity markets lost nearly 50%, the portfolio's drawdown barely touched 5%. Its worst performance came in 2022, when it fell just over 10% as central banks began raising interest rates and long bonds sold off.
A UK version of the portfolio, using the Royal London Short-Term Money Market Fund for cash, the Vanguard UK Long Duration Gilt Index Fund for long bonds, the Vanguard FTSE All Share Index for shares and Gold Bullion Securities for gold, returned a compound annual growth rate of 5.8% over the past five years. Long gilts declined around 48%, but a 132% jump in gold prices offset that, while cash benefited from rising interest rates and the FTSE All Share added around 70% including dividends. The portfolio's weighted average cost was 0.17%.