Permanent Portfolio (Harry Browne) vs Golden Butterfly Portfolio
30-year historical backtest comparison, $10,000 initial investment each.
Bottom line: The Golden Butterfly is essentially the Permanent Portfolio with an added small-cap value tilt and more stocks, aiming for higher returns with only slightly more risk.
Cumulative Growth
Key Metrics
| Strategy | CAGR | Max Drawdown | Volatility | Sharpe | Sortino |
|---|---|---|---|---|---|
| Permanent Portfolio (Harry Browne) | +6.88% | -16.2% | 7.5% | 0.66 | 1.12 |
| Golden Butterfly Portfolio | +8.54% | -17.6% | 8.0% | 0.82 | 1.34 |
Annual Returns
| Strategy | '07 | '08 | '09 | '10 | '11 | '12 | '13 | '14 | '15 | '16 | '17 | '18 | '19 | '20 | '21 | '22 | '23 | '24 | '25 | '26 | '00 | '01 | '02 | '03 | '04 | '05 | '06 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Permanent Portfolio (Harry Browne) | +12 | -6 | +8 | +12 | +18 | +3 | -2 | +12 | -5 | +6 | +10 | 0 | +16 | +11 | +4 | -6 | +6 | +15 | +23 | 0 | — | — | — | — | — | — | — |
| Golden Butterfly Portfolio | +10 | -12 | +15 | +16 | +15 | +6 | +3 | +12 | -5 | +12 | +11 | -1 | +15 | +13 | +8 | -5 | +5 | +16 | +21 | +2 | -3 | +5 | +8 | +19 | +6 | +14 | +10 |
Permanent Portfolio (Harry Browne)
Four equal slices built to survive any economic season, not just to grow the fastest in good times.
Golden Butterfly Portfolio
A five-wing evolution of the Permanent Portfolio that adds growth without giving up its resilience.
A close family resemblance
The Golden Butterfly was designed as an evolution of the Permanent Portfolio. It keeps the same instincts — diversify across economic environments — but replaces the four-way split with five 20% blocks: US large-cap, US small-cap value, long-term bonds, short-term bonds, and gold.
The key changes are more equity exposure (40% versus 25%) and a deliberate small-cap value tilt, both aimed at raising expected returns.
What the tilt buys
By swapping some cash for stocks and adding the historically higher-returning small-cap value factor, the Golden Butterfly has generally produced higher long-run returns than the Permanent Portfolio, with only a modest increase in volatility and drawdown.
Its balance of short- and long-term bonds also moderates interest-rate sensitivity compared with the Permanent Portfolio's single long-bond block.
Which to choose
If you want the calmest possible ride and value simplicity, the Permanent Portfolio's larger cash cushion appeals. If you are willing to accept slightly more risk for higher expected growth, the Golden Butterfly's equity and small-cap-value tilt is the upgrade. The charts below show how the trade-off has played out historically.
Frequently Asked Questions
Is the Golden Butterfly better than the Permanent Portfolio?
The Golden Butterfly has historically delivered higher returns thanks to more stocks and a small-cap value tilt, with only slightly more risk. Whether that makes it 'better' depends on your tolerance for volatility versus your desire for growth.
How is the Golden Butterfly different from the Permanent Portfolio?
The Golden Butterfly uses five 20% blocks including small-cap value and splits bonds into long and short term, whereas the Permanent Portfolio uses four 25% blocks with a large cash position. The Golden Butterfly holds more equities overall.
Hypothetical historical performance based on backtested data. Past performance does not guarantee future results. This site is for educational purposes only and does not constitute investment advice. Full disclaimer