2026 Gold in the Mix: Standalone Returns, Risk, and Its Role in Model Portfolios

Gold in the Mix: Standalone Returns, Risk, and Its Role in Model Portfolios

September 2026

Topics this month

Gold's standalone performance as an ETF (GLD), including drawdown and returns across multiple time horizons
How gold compares to other asset-class and sector ETFs, such as Technology (IXN)
Gold's role in strategic model portfolios (s.talg, s.brow, s.plus, s.noeq)
Risk-adjusted performance (Sortino ratio) of gold exposure, including the tactical Adaptive Allocation F (t.aaaf) portfolio

Welcome to the September 2026 commentary from RecipeInvesting.com. This month's discussion draws on the Portfolio Recipes and Results available to investor subscribers at go.recipeinvesting.com, which list all of our portfolio recipes along with their ingredients (the exchange-traded funds used to build them). That broad range of ETFs is especially useful this month, since the topic is gold. We will look at gold both as a standalone ETF and as an ingredient in several of the portfolio recipes we track.

Gold's Standalone Performance

Based on month-end closing prices, gold (GLD) has shown the following performance over the past two decades:

A maximum drawdown of about 43% over the past 20 years, a decline that also falls within the more recent 15-year window at 41%
Annualized returns of 31% over 3 years, 19% over 5 years, and 12.6% more recently
A weaker 5.7% annualized return over 15 years, well behind the roughly 9.7% posted by the Balanced 60/40 portfolio (s.6040) and the more than 15% delivered by the S&P 500 (SPY)

Gold has clearly been on a hot streak. Its five-year performance chart shows it outperforming all the other benchmarks tracked, including global equities, the S&P 500, a 60/40 blend, and bonds. Interestingly, gold has pulled back somewhat since its recent peak, but it has been trending upward again lately. There is no denying it has had a strong run over the past several months.

How Gold Compares to Other Asset Classes

It is also worth considering how gold compares to other asset classes. Sorting the Ingredient Summary by 20-year returns, from best to worst, places gold further down the list. Gold has returned 9.9% over the past 20 years, which is a solid result, but a number of portfolio ingredients (asset-class ETFs and global sector ETFs) have done better over that same period.

Technology (IXN) offers a useful comparison:

A 20-year return of 15.9%, ahead of gold's 9.9% over the same period
Over 15 years, a 34% drawdown paired with a 20.8% return, well above gold's 5.7% return over that stretch
Even over the past three years, where gold has posted a strong 31.4% annualized return, Technology still came out ahead, likely buoyed by the AI trade

Still, gold has done well. The question is not only how well an asset has performed, but what risk was taken on to achieve that performance, and how it compares to other ingredients, sector ETFs, or portfolio recipes. Gold is strong, but a number of other exchange-traded funds at the asset-class level are giving it a run for its money.

Gold in Strategic Portfolios

Now let's turn to what we call portfolio recipes, our model portfolios. Several of these include gold as one of the ingredients in the strategic portfolios. We use the prefix t. for tactical portfolios and s. for strategic portfolios, and several of the strategic portfolios use gold as one of their ingredients.

A few of our strategic portfolios include gold as part of the mix, with results that vary:

Talmud Equities and Gold (s.talg): carries a one-third allocation to gold and has performed about as well as gold itself over the 20-year period, indicating that gold plays a meaningful role in its returns. Over 15 years, its performance is so close to the Balanced 60/40 portfolio that the orange dot for s.talg sits right on top of the teal dot on the chart. Over the full 20-year period, though, it has produced a higher return with higher risk, which is worth keeping in mind.
Harry Browne Inspired (s.brow): allocates one quarter (25%) to gold. It has not performed quite as well as gold over 20 years, but has been fairly steady and beats gold over 15 years, with a drawdown of only 17.5%, a notable result likely to appeal to investors who favor lower-volatility portfolios.
Permanent Plus (s.plus): a simplified version of the Harry Browne portfolio that drops the cash component and splits the remaining allocation evenly across three ETFs, one third of which is gold. It has returned 9.4% annualized over 20 years with a 24% drawdown, and has stayed relatively steady over five years, though its 7.7% annualized return there is the weakest among the portfolios discussed.
No Equity Portfolio (s.noeq): also allocates one third to gold, alongside two other non-equity ETFs. It shows a similar maximum drawdown to Permanent Plus, but has lagged it on a head-to-head basis in every period except year to date.

That covers how several of the portfolios we have tracked over the past decade or more have performed with gold as part of the mix.

Gold in Tactical Portfolios

Another useful lens here is the Sortino ratio, which gives a clear read on whether the return being generated is enough to offset the risk being taken on. Looking at the data sorted by 20-year performance, it's the tactical portfolios that are getting the job done, with Sortino ratios above one. s.plus, discussed earlier, has a Sortino ratio of 1.19, meaning it generates some incremental return for the risk taken on, though not as much as some of the other tactical portfolios achieve.

One notable portfolio that includes gold from time to time is the tactical Adaptive Allocation F (t.aaaf), which has been popular with subscribers largely because of its strong risk-adjusted performance:

A Sortino ratio of 1.99 over the past 20 years, and even higher over the past three years
A weaker Sortino ratio of 0.88 over the past five years, meaning it has not really delivered returns above the market rate given the level of risk taken on during that stretch

Looking at the maximum drawdown graph, t.aaaf shows this clearly: over the 15-year period, it sits well above and to the left of both the Balanced 60/40 portfolio and the S&P 500. Compared with the S&P 500, it has taken on lower risk and delivered lower return, but it remains clearly above and to the left of the teal dot representing the Balanced 60/40 portfolio.

This portfolio uses an adaptive approach, drawing from a universe of nine exchange-traded funds and holding up to five of them at a time, with allocations selected based on a risk-adjusted methodology. A few figures illustrate how it has worked in practice:

Gold exposure: held in 15 of the past 21 months, with the allocation ranging from as low as 9% to as high as 79%
20-year performance: a drawdown of under 19% paired with a 14.5% return
3-year performance: a 22% annualized return

This is just one example of an adaptive, tactical portfolio that can move in and out of gold as needed. Its returns are not the best on record; higher returns can certainly be found elsewhere, but those come with different risk profiles.

Conclusion

Gold on its own clearly has its moments and can perform quite well, but it is outperformed by several other individual assets and asset classes. There is still a case for holding it, since over the past 20 years, gold sits roughly along the frontier of risk and return:

Assets such as IWF and IXN post better total returns on their own, and a number of other options also offer a better 20-year return than gold
Gold's 42.9% drawdown is the lowest among these, so to be fair, gold has delivered a lower return with lower risk as measured by maximum drawdown
Technology's 52% drawdown and QQQ's 49% drawdown come with significantly higher returns, showing that other asset classes or ingredients can beat gold over a 10-, 15-, or 20-year time horizon

Turning back to the recipes, the one we track that seems to do particularly well with a one-third gold allocation is s.plus. This portfolio is a simplification, or adaptation, of the four-asset Harry Browne portfolio: it drops the cash component and reduces the mix to three ETFs. Over the past 20 years, s.plus has returned 9.4% annualized with only a 24% drawdown, making it a simple, static, truly strategic portfolio to implement.

On the tactical side, the popular t.aaaf portfolio has held gold at levels as high as 79% on a month-to-month basis. Because it rebalances monthly, its allocations can swing significantly, and that turnover carries tax consequences for the ins and outs. In a tax-deferred or retirement account, though, this kind of strategy could work well for investors comfortable with that approach. t.aaaf has produced an 18.9% drawdown with a 14.5% annualized return, and a correspondingly healthy Sortino ratio reflecting that balance between risk and return.

That covers a brief review of gold on its own, within strategic portfolios, and within one tactical portfolio. Gold has certainly had its run lately, though it has since come back down. Even so, among the portfolios we track, there are a number of scenarios where gold can make sense and provide a solid risk-adjusted return.