Create a static (short-horizon) investment portfol
Create a static (short-horizon) investment portfolio Uses MSCI World as a benchmark and minimizes the corresponding tracking error But avoids oil and gas and linked industries Request additional information as needed
Recommended portfolio
Use 73.1% ESGV.US + 26.9% VSGX.US.
This was the lowest-tracking-error portfolio among the screened candidates I tested against an MSCI World proxy.
Why this won
- It had the lowest realized annualized tracking error to URTH (iShares MSCI World ETF), used here as a tradeable MSCI World proxy.
- It satisfies your requested broad fossil-fuel screen, not just reserve ownership:
- ESGV and VSGX provider documents explicitly exclude coal, oil, and gas plus linked industries such as exploration, drilling, refining, oilfield services, pipelines, thermal coal power, and gas distribution.
- It keeps implementation balanced and simple with only 2 ETFs.
Candidate comparison
- Vanguard choice pair: 73.1% ESGV / 26.9% VSGX → best benchmark fit
- HRP anchor across 4 screened ETFs → more diversified, but meaningfully higher tracking error
- iShares advanced pair (USXF / DMXF) → broad screen, but the worst tracking match in this test window
Important bounds
- I estimated benchmark fit using historical daily returns over the last ~2 years and URTH as a tradeable MSCI World proxy, not the raw index series itself.
- This is a static short-horizon design. If you want a stricter institutional benchmark match, the next step would be to tailor the instrument set to your actual domicile and trading venue (for example, UCITS share classes).
Annualized tracking error
2.53%
Annualized excess return vs proxy
0.93%
Screened portfolios vs MSCI World proxy
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Candidate portfolio comparison
Selected portfolio weights
Create an invest strategy with activation ready version
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Done — I created the draft strategy
Strategy: Global Ex-Fossil Benchmark-Aware Equity
Status: Created and left paused so it is activation-ready, but not activated yet.
What this strategy does
- Manages a global developed-markets equity portfolio
- Stays benchmark-aware to MSCI World
- Enforces a broad fossil-fuel and linked-industry exclusion
- Allows moderate tilts, not high-conviction active bets
- Uses a screened ETF universe: ESGV.US, VSGX.US, USXF.US, DMXF.US
How I shaped it
I used the portfolio research from the prior step as the strategy rehearsal. That work found the strongest practical starting anchor was the Vanguard screened pair with roughly 73% ESGV / 27% VSGX, which had the lowest realized tracking error in the tested set versus the MSCI World proxy.
Activation-ready settings
- Paper capital: $100,000
- Rebalance: Monthly at 21:00 UTC
- Max positions: 4
- Max single position: 80%
- Drawdown guardrail: 20% with stop-on-drawdown enabled
Important boundary
This is ready for paper activation only. I did not activate it yet, because activation is an explicit approval step.
Execution status
Paused draft
Deployment mode
Paper strategy