Gold Performance, Berkshire Analysis, Fidelity Fund Insights & Portfolio Allocation Trade-Offs (June 2025)

Topics this month

• Gold ETF Performance Analysis: GLD's 41% Return vs. S&P 500 Long-Term Comparison
• Portfolio Allocation with Gold: Talmud Equities and Gold vs. 60/40 Balanced Portfolio
• Berkshire Hathaway (BRK.A) Performance Review: Recent Decline and 20-Year Track Record
• Permanent Portfolio (PRPFX) Analysis: 20% Gold Allocation and Risk-Adjusted Returns
• Fidelity Fund Categories Deep Dive: Fund Performance and Benchmark Comparisons

Welcome to the June 2025 Recipe Investing commentary. Each month, we share updates and insights to help investors stay informed and make thoughtful portfolio decisions. If you’ve logged in at go.RecipeInvesting.com, you can access the latest Free, Investor, and new Pro subscription content. As always, the site is refreshed at the end of each month—typically around the first—with updated portfolio recipes (our term for model portfolios) and key ingredients (ETFs) based on current market conditions.

Let’s take a look at portfolio ingredients and their total return (annualized) over the past year. When we sort by this metric:

• Argentina (ARGT) leads the list, posting the highest return over the past 12-month period.
  
• Gold (GLD) follows closely, with an impressive 41% return over the same timeframe.
  Gold has been a frequent topic in the financial news recently, and this performance reflects its strong momentum.

Looking at a longer-term perspective—the past 20 years:

• Gold has delivered an annualized return of 10.4%.
  
• The S&P 500 (SPY) has also delivered an annualized return of 10.4%, when using SPY as a proxy.
  In other words, gold and the S&P 500 have produced similar long-term returns.

When comparing risk and drawdowns, gold’s maximum drawdown of approximately 43% is less severe than that of the S&P 500. However, the S&P 500 has shown greater consistency in intermediate-term returns in recent years, while gold’s performance over the past 15 years has been less stable, marked by periods of relatively weaker returns.

Gold ETF Performance Analysis

If we take a closer look at gold—represented here by the GLD ticker—we can see that its recent surge has primarily occurred within the past year or two.

Prior to this recent run-up:

• Over the past five years, gold (as indicated by the corresponding line on the chart) has actually lagged behind the performance of the 60/40 Balanced Portfolio (s.6040).
  
• It’s only in the more recent period that gold has ticked up and is now approaching the S&P 500 in terms of five-year performance.

Looking at longer-term returns:

• Over the past 15 years, gold has delivered an annualized return of 6.5%.
  
• In comparison, the S&P 500 has returned 14% annualized over the same period.
  

In the most recent months, gold has experienced a slight pullback, while the S&P 500 is up 6.3% over the same period. Like many assets we track, gold’s performance varies considerably depending on the time horizon being considered.

Portfolio Allocation with Gold

Now let’s take a look at portfolios that include gold. One example is the Talmud Equities and Gold (s.talg) portfolio, which maintains a static allocation of one-third gold. For a portfolio with such a significant gold allocation, it has performed quite well—generally outperforming the 60/40 Balanced Portfolio over the past five years.

Looking further into the risk-return characteristics, we focus on metrics like downside deviation and maximum drawdown, with downside deviation being particularly useful in this context. In the scatterplot, the orange dot representing the Talmud Equities and Gold portfolio appears above and to the right of the Balanced Portfolio (s.6040), and slightly below and to the left of the S&P 500 (SPY).

This positioning suggests that the portfolio’s returns and risk profile have generally fallen between those of the S&P 500 and the 60/40 Balanced Portfolio. Notably, over the past year, the portfolio has performed exceptionally well, now appearing well above and to the left of the S&P 500 blue dot on the scatterplot, reflecting both strong returns and favorable risk characteristics.

Talmud Equities and Gold portfolio’s performance over various timeframes:

• 1-year return: 21.8%
  
• 3-year annualized return: 12.1%
  
• 15-year annualized return: 10.0%
  
• 20-year annualized return: 10.0%

It’s worth noting that the portfolio does exhibit some drawdown, which investors will need to manage. On the risk-return compass, it plots above and to the right of the Balanced Portfolio, indicating a higher risk, higher return profile—positioned, as one would expect, between the S&P 500 and the 60/40 Balanced Portfolio.

Permanent Portfolio (PRPFX) Analysis

If the investor is looking for a portfolio with a meaningful gold allocation, the Talmud Equities and Gold portfolio—is one option. Another is the Permanent Portfolio (PRPFX), a mutual fund that has returned 20.8% over the past year. Its allocations include approximately 20% gold, along with silver, Swiss francs, growth stocks with an aggressive tilt, and various U.S. dollar assets. Evaluating its long-term performance, PRPFX has delivered steady returns with a 20-year annualized return of 7.9% and a 15-year annualized return of 7.4%.

Looking at the scatterplot:

• 1-year performance: Strong — positioned well above the Balanced Portfolio (s.6040).
  
• 3-year performance: Also above and to the left of the Balanced Portfolio, reflecting a favorable risk-return profile.
  
• 15-year performance: Positioned below the Balanced Portfolio on the scatterplot.
  
  

On the risk-return compass, PRPFX earns positive marks:

• In certain periods, it has achieved the difficult combination of delivering higher returns with lower risk than a 60/40 Balanced Portfolio.
  

While its overall long-term return does not match the stronger performance of the Talmud Equities and Gold portfolio we looked at earlier, it remains a notable example of a portfolio with a sizable gold allocation and a balanced approach to risk.

Berkshire Hathaway (BRK.A) Performance Review

Let’s take a look at the one-month winners and losers. Top performers include Sector Rotation (NAVFX), which posted strong returns, and several other funds with positive one-month returns. Reversing the table’s sort order reveals the weakest performers, with Berkshire Hathaway (BRK.A) ranking as the worst performer within this curated list of allocation portfolios and asset allocation funds we track, posting a -5.4% return over the past month.

Several factors may have contributed to Berkshire Hathaway’s recent underperformance:

• Warren Buffett’s announced retirement, which likely triggered some selling activity.
• A reported 14% decline in operating earnings during the first quarter.
• Lower underwriting profits contributing to weaker results.
• Both structural and perceived challenges may be creating headwinds for the stock in the short term.
  

Looking at Berkshire Hathaway’s longer-term record:

• 20-year annualized return: 11.6%.
• Maximum drawdown: -44.5% — notably better than the S&P 500’s maximum drawdown of ~50%.

Next, we take a closer look at Berkshire Hathaway and its performance. The line representing BRK.A shows it has outperformed the S&P 500 over the past five years with notably strong performance. Examining its positioning on the risk-return scatterplots across multiple timeframes, we see that over 20 years it is plotted above and to the right of the S&P 500, indicating higher risk and higher return but still relatively close to the index; over 15 years it is positioned almost identical to the S&P 500 in both risk and return; over 10 years it remains very similar to the S&P 500; over 1, 3, and 5 years it shows a higher risk and higher return profile compared to the S&P 500.

In the shorter time periods—1, 3, and 5 years—BRK.A shows a clear higher risk/higher return profile. In the longer time periods—10, 15, and 20 years—it tracks much closer to the S&P 500, particularly at the 15- and 10-year marks where the profiles are almost identical. This pattern shows that during certain timeframes, the portfolio's risk-return profile diverges, while in others it closely matches that of a broad market index.

Fidelity Fund Categories Deep Dive

For our next item, we'll explore Fidelity fund categories through our analytical framework. This analysis is available through our Pro subscription service, which has been offered for several months. The Pro subscription provides access to Fund Insights, our specialized sister platform dedicated to fund analysis. Fund Insights applies the same analytical methodology we employ for our tactical, strategic, and managed portfolios. However, this platform focuses specifically on fund families and their respective categories, with Fidelity serving as our current example.

Looking at all Fidelity funds we can review detailed performance across different categories over the past year:

• As expected, the Fidelity Bitcoin Fund leads with a 54.6% return.
• The Fidelity Gold Fund is also performing well, up 46.9%, which ties back to our earlier gold discussion.
  

The Fund Insights category page now includes a Fidelity Fund Categories overview page that provides a quick look at different fund categories. This feature allows users to explore how various groups of Fidelity funds are performing.

Each category shows performance data and risk information, making it easier to compare different fund groups. This approach helps investors identify which fund categories might work best for their investment goals and comfort with risk.

For example:

• In the Balanced Funds category:
  • There aren’t many funds, so only a few gray dots appear on the scatterplot.
  • The balanced funds generally track close to our 60/40 Balanced Portfolio benchmark.
  • Interestingly, at least one balanced fund shows higher return and lower risk than the 60/40 benchmark over a 20-year period.

Other categories:

• Digital Assets:
  • Only one fund is represented here, and it is somewhat of an outlier on the chart.
• High Yield Funds:
  • Adjusting the view slightly to fit all data points, we can observe a clear pattern:
    • The 20-year performance line for high yield funds falls between the 60/40 Balanced Portfolio and the Bond Portfolio benchmarks.
    • The high yield funds are positioned neatly along this risk-return frontier.
    • However, none of the high yield funds outperform either the balanced or bond benchmarks in both risk and return.

Let’s continue exploring to see if we find any Fidelity fund categories that substantially outperform our three benchmarks (shown in blue, teal, and purple).

Among bond categories, Inflation-Protected Bonds genuinely outperform their benchmark with superior risk-adjusted returns, while Short-Term Bond funds offer several options with higher returns and lower risk than BND. Most other bond categories—Intermediate-Term, International Fixed Income, and Mortgage-Backed Securities—cluster near their respective benchmarks without notable outperformance.

Equity categories present a challenging picture. Large Cap, Mid Cap, and Small Cap funds generally exhibit higher risk with lower returns compared to the S&P 500, though select Large Cap funds show five-year promise. Regional funds underperform with both lower returns and higher risk. Sector funds occasionally achieve the desirable combination of higher returns with lower risk, particularly over five and twenty-year periods, though this positioning remains difficult to maintain.

The structured categories reveal design ambitions that don't translate to superior performance. Target Date and Target Risk funds, despite elegant structuring along the risk-return frontier, fail to surpass basic 60/40 portfolios or the S&P 500—suggesting simpler ETF allocations might deliver better results. Tax-Exempt funds provide value mainly through tax benefits, while Thematic funds fail to justify their complexity compared to straightforward index strategies.

This example highlights a portion of our Fund Insights tool, which offers a range of analytics across multiple fund families, including Vanguard, Fidelity, iShares, and American funds.

Being able to explore an entire fund family in depth—particularly with 20-year historical context—provides valuable perspective on how different categories and individual funds have performed relative to key benchmarks.