October 2025: Portfolio Update
Running Money: October Update
If you are tuned into the market you are aware of the strength of the US equity market from the April (tariff scare) lows. US equity markets have been steadily grinding higher. More recently, interest rates have also declined, boosting the tailwind for US equity. A rate cut here, a rate cut there…The Fed has stated they are more interested to respond to weak job creation than rising inflation. So there you have it…they are running it hot.
“Running it hot” = “Growth at a cost”:
Asset owners benefit. Hard assets have been reawakened (commodities). Bonds underperform stocks. Inflation will persist. In short, the “K-shaped” economy continues (the top 10% of household wealth ascend, bottom 90% struggle). This “K-shaped” theme can be connected to just about every macro data point coming across WLA’s newsfeed. For managing client portfolios, it means allocating to traditional risk assets (US Equity) and sourcing attractive total return / diversification opportunities in the Satellite Portfolio.
WLA manages client portfolios in three silos.
Short-term cash and treasury bonds.
US Equity.
Satellite Portfolio (Attractive total return, low correlation to US Equity, income component).
Silo 1: Short-Term Cash and Treasury Bonds.
Keep it simple. Avoid duration risk (7, 10, 15 and 20 year maturities). Avoid using ETFs and Mutual Funds for bond exposure. When you avoid risk in your bond allocation, it is WLA’s belief that this opens up opportunity for more exposure to “good risk” in the rest of your portfolio (silo 2 and 3). Current client portfolios are a mix of money market and laddered treasury bonds (1, 2, and 5 year maturity). Current yields are about 3.75 – 4.00%.
Silo 2: US Equity
WLA uses a small number of US equity Large Cap ETFs. They are differentiated by growth, value, market cap weight and equal weight characteristics. When taking on a new client, WLA will establish starter positions and look to build size opportunistically on dips. The biggest current “factor” in WLA’s US equity exposure is the absence of small cap.
WLA US Equity ETF examples.
Performance year-to-date through Sept 30, 2025:
SPY, up 14.73% (S&P 500)
OEF, up 15.98% (S&P 100)
EQWL, up 13.70% (S&P 100 Equal Weight)
IWX, up 12.70% (Russell Top 200 Value)
RSP, up 9.75% (S&P 500 Equal Weight)
Silo 3: Satellite Portfolio
WLA typically maintains three to five positions in the Satellite Portfolio per client account. The goal is to identify attractive total return, often with an income component and low correlation to US equity markets. While past performance is no guarantee for future results, lower correlation plus income may reduce draw-down in an equity market correction and that is one of the goals for this silo. This includes a range of ideas: fixed income alternatives, inflation hedges, commodities, dividend focused exposures and other specialty sectors with attractive total return potential.
WLA Satellite Portfolio exposures include:
-Utilities, high dividend, defensive characteristics, fixed income surrogate.
-MLPs, energy infrastructure, high dividend, fixed income surrogate.
-Energy sector exposure, high dividend, low correlation to US equity (MAG7)
-Dividend Equity ETFs, high dividend, fixed income surrogate, low correlation to MAG7.
-Gold, inflation hedge, fiat debasement.
-Uranium, attractive return potential, low correlation to US Equity.
WLA Satellite Portfolio ETF examples.
Performance year-to-date through Sept 30, 2025:
XLU, up 17.68% (Utilities)
AMLP, up 3.39% (MLPs)
XLE, up 6.82% (Energy)
IDV, up 38.52% (International Dividend)
SCHD, up 2.80% (US Dividend)
PHYS, up 47.07% (Gold)
SRUUF, up 16.71% (Uranium)
XME, up 64.79% (Metals and Mining) (XME was a long-term, small position with limited exposure across WLA clients, exited the position in October 2025).
WLA Portfolio Summary:
US Equity is in a bull market. Mega cap (MAG7) concentration risks continue. AI related stocks are driving the majority of US equity performance in 2025.
WLA's Satellite Portfolio is working well - WLA has assembled attractive total return exposure with reduced correlation to MAG7.
Across WLA’s client portfolios for 2025, clients are generally keeping up with the market - - with substantially less risk*.
*Keeping up with less risk how? A steady allocation to short-term treasuries PLUS total return strength from the satellite portfolio. WLA’s US Equity exposure is just beta right now, grinding higher (beta = generic market exposure).
Best,
Jon
Disclosures: Not investment advice. Performance figures are sourced from the following ETF links. Above performance figures are not representative of WLA client results, WLA client performance is based on different time periods among other factors. Actual client performance varies based on multiple factors including risk tolerance, when WLA was hired and when positions were established. WLA client holding period for the above examples varies, do not assume it’s the year to date period for any of the examples provided, it may be longer or shorter. Do not assume every WLA client holds every ETF example, client risk tolerance and when WLA was hired effects portfolio allocations. Read the disclosures on the ETF links provided. Performance listed is for illustration purposes only, not an endorsement to buy or sell. Do you own research and/or discuss with a professional investment advisor. Read full disclosures located in this email and at www.westernlevel.com.
SPY https://www.ssga.com/library-content/products/factsheets/etfs/us/factsheet-us-en-spy.pdf
OEF https://www.ishares.com/us/literature/fact-sheet/oef-ishares-s-p-100-etf-fund-fact-sheet-en-us.pdf
IWX https://www.blackrock.com/us/individual/products/239722/ishares-russell-top-200-value-etf
RSP https://www.invesco.com/us/en/financial-products/etfs/invesco-sp-500-equal-weight-etf.html#Performance
EQWL https://www.invesco.com/us/en/financial-products/etfs/invesco-sp-100-equal-weight-etf.html#Performance
XLU https://www.sectorspdrs.com/api/documents/by-fullname/Sector%20Documents/XLU%20-%20Utilities%20Documents/Fact%20Sheet
AMLP https://www.alpsfunds.com/hubfs/alps-docs/lit/fs/alerian-mlp-etf-amlp-fs.pdf
XLE https://www.sectorspdrs.com/api/documents/by-fullname/Sector%20Documents/XLE%20-%20Energy%20Documents/Fact%20Sheet
SCHD https://www.schwabassetmanagement.com/resource/schd-fact-sheet
IDV https://www.ishares.com/us/products/239499/ishares-international-select-dividend-etf
PHYS https://sprott.com/media/xcilumow/phys.pdf
SRUUF https://sprott.com/media/qztbbd4d/uranium-trust-factsheet.pdf
XME https://www.ssga.com/library-content/products/factsheets/etfs/us/factsheet-us-en-xme.pdf
Jon Fritzinger
Founder / CEO
Western Level Advisors LLC
www.westernlevel.com
Hello@westernlevel.com
About Western Level:
Western Level Advisors LLC is an independent Registered Investment Advisor. The firm provides investment management and long-term financial planning services for individuals. All services are provided on a fiduciary and fee-only basis. Western Level’s only purpose is to establish a clear pathway for each client to help them manage and compound their wealth.
The information provided in this commentary is intended to be informative and not intended to be advice relative to any investment or portfolio offered through WLA. The views expressed in this commentary reflect the opinion of the author based on data available as of the date this commentary was written and is subject to change without notice. This commentary is not a complete analysis of any sector, industry or security. This commentary is not intended to be a recommendation to buy or sell any investment. Please contact WLA with any questions regarding your accounts. The information provided in this commentary is not a solicitation for the investment management or other services offered by WLA. References incorporated into the commentary from third party sources are as of the date specified and are believed to be reliable. WLA is not responsible for errors in the third party data. Source information is provided under each chart. Additional disclosures are available at www.westernlevel.com.