Lethargic Asset Allocation
Lethargic Asset Allocation (Keller, 2019): a static 75% core of IWD/GLD/IEF (25% each) paired with a 25% growth sleeve that rotates QQQ to SHY only when unemployment is above its 12-month moving average AND SPY closes below its 200-day SMA.
- Type: Tactical
- Frequency: monthly
- Asset classes: US Large Cap Value, Gold, Intermediate Treasuries, US Equity (Nasdaq 100), Short-Term Treasuries
- Backtest window: 2004-11-18 to 2026-11-10
- 1Y
- 8.5%
- 3Y
- 64.7%
- CAGR
- 16.7%
- Max DD
- -8.4%
- Sharpe
- 1.56
Methodology
- Hold a static 75% core of IWD 25%, GLD 25%, and IEF 25%.
- Check whether US unemployment (FRED UNRATE) is above its 12-month SMA.
- Check whether SPY is below its 200-day SMA.
- If BOTH conditions are true, allocate the 25% growth sleeve to SHY.
- Otherwise allocate the 25% growth sleeve to QQQ.
Source: Keller, W.J. (2019). Lethargic Asset Allocation (LAA).
Headline backtest performance as of 2026-11-10.