TBW - Top-performing portfolios of 2025: What were the winning strategies?

In brief

• Five separate portfolio allocations have been analysed in 2025 using a number of indicators.
• The "Mag7" portfolio comes out on top in terms of absolute performance, but also records the highest drawdown.
• The tangible assets portfolio (gold + bitcoin) outperforms the benchmark and all other allocations in terms of risk-adjusted performance.
• Excluding the period from the flash crash to the present day, the optimal allocation of the tangible asset portfolio incorporates a 10% exposure to bitcoin.

Introduction to the methodology

This analysis compares the performance, over one year, of five portfolios representative of the current major dynamics of the financial markets.

The allocations studied are as follows:

• A tangible assets portfolio, made up equally of bitcoin and gold;
• A "Mag7" portfolio, evenly distributed between the seven largest US stock market capitalisations at the time of the study;
• A classic 60/40 portfolio, with 60% equities and 40% bonds ;
• An "altcoins-gold" portfolio, combining risky assets and defensive assets at 50% each;
• A real estate portfolio invested 100% in a global real estate ETF (iShares Real Estate Investment Trust - REET), exposed in particular to residential and student housing and prefabricated housing.

These portfolios have been selected because the assets that make them up have limited correlation with each other overall. The highest correlation is logically within the Mag7 portfolio, but the average correlation between the various components remains moderate at 0.38, well below the threshold generally considered high (0.6).

The performance of the assets was calculated over the period from 1 December 2024 to 1 December 2025, with monthly tracking. Using this data, portfolio performances were reconstituted according to the weightings selected, and then compared with the S&P 500 over the same period.

The analysis concludes with a detailed comparison of the portfolios in order to identify the best-performing allocation over the year. Several indicators are used: total return, best monthly performance, maximum drawdown, as well as the Sharpe and Sortino ratios, which assess risk-adjusted performance.

For the purposes of the exercise, notional capital of $1 million is invested in each of the portfolios. While a real portfolio would typically combine several of these exposures, the objective here is different: to identify which market "narrative" dominates in a given economic context, identify the leading assets, and derive relevant weightings for a meaningful capital allocation.

Performances for equity, bond and real estate portfolios include dividends.

The market data used comes from Investing. The S&P 500 is used as the main benchmark and reference for the 60/40 portfolio. The BNDW Global Bond ETF (Vanguard Total World Bond ETF) is used as a proxy for the bond market. The TOTAL2ES index, which includes cryptoassets excluding bitcoin and stablecoins, is used as a proxy for altcoins. The seven stocks in the Mag7 portfolio are : Nvidia, Microsoft, Apple, Google, Amazon, Meta and Broadcom.

Overall analysis: the Mag7 portfolio is the best performer, but incorporates a lot of risk

The Mag7 portfolio dominates in terms of absolute performance, but not on risk-adjusted indicators.

It outperforms the S&P 500 by more than double, mainly thanks to three companies linked to artificial intelligence: Broadcom, Alphabet and Nvidia.

Note that the property portfolio was the best allocation in the first quarter of 2025, before being overtaken by the tangible assets portfolio in March and then by the S&P 500 at the end of May.

Allocations exposed to digital assets significantly outperformed all financial markets during the summer, when the altcoins and gold portfolios rose during a brief "alt season", led by Ethereum, before falling sharply in October following a flash crash and marked weakness in November.

The "altcoins-gold" portfolio recorded the best monthly performance of all the allocations analysed, with a gain of 15.27%.

In contrast, the Mag7 portfolio suffered the biggest drawdown, at -15.64% between January and March, against a backdrop of tensions linked to the tariff announcements.

The portfolio with the most limited downside risk was the property portfolio, with a maximum drawdown of just -2.6%.

What allocation between gold and bitcoin?

Once it has been established that the portfolio of tangible assets is the best performer once risk has been taken into account, a key question remains: what is the best allocation between gold and bitcoin?

To answer this, the analysis relies on the concept of the efficient frontier. The idea is simple: of all the possible combinations between two risky assets, some offer the best possible return for a given level of risk. These combinations form what is known as the efficient frontier.

To this frontier is added a particular straight line, known as the Capital Allocation Line, or CAL. It represents portfolios that combine risky assets with a risk-free investment, such as Treasury bills. The steeper this line, the better the portfolio's return for the risk taken.

In this case, the efficient frontier groups together all the possible allocations between gold and bitcoin within the portfolio of tangible assets. The most important point is where the capital allocation line touches the frontier: this corresponds to the most efficient portfolio, i.e. the one with the best Sharpe ratio.

Over the entire period studied, this optimal portfolio is 100% gold, with no exposure to bitcoin, and a Sharpe ratio of 4.27. This result is mainly due to the sharp fall in bitcoin after the flash crash of 10 October, which sharply worsened its risk profile. For the year as a whole, bitcoin ended the year virtually unchanged, while gold rose sharply. The portfolio invested entirely in gold thus achieved a return of 63.14%, with relatively contained volatility of 14.78.

The analysis becomes more nuanced, however, when we exclude the last three months of the year, which were particularly unfavourable for bitcoin. In this case, the best allocation is no longer 100% gold. The most efficient portfolio combines around 90% gold and 10% bitcoin. Its return is slightly lower in absolute terms, but its Sharpe ratio reaches 4.56, almost 7% more efficient than the portfolio invested solely in gold.

To sum up, over the full year, gold is clearly the dominant asset. But in the absence of the end-of-year volatility shock, a small exposure to bitcoin further improves the trade-off between return and risk.

The Big Whale's opinion

This study highlights several clear findings. In 2025, the macroeconomic environment was marked by a clear liquidity squeeze: rising unemployment, interest rates at levels not seen for over twenty years, continued quantitative tightening and recession signals sent by ISM PMI indicators. Against this backdrop, digital assets logically suffered.

As flows into crypto ETFs and digital asset treasuries dried up, the market ran out of relays. Unlike in previous cycles, retail investors were largely absent due to a lack of available capital to invest. At the same time, equity markets rose sharply, suggesting that liquidity, which was scarcer but more stable, was directed first and foremost towards the dominant theme of the year: artificial intelligence.

These dynamics reveal a clear hierarchy in allocation choices. In an environment where risk-free returns are falling, capital is focusing first on equities, and in particular on those that carry the strongest narratives of the global economy. Digital assets, though risky, have taken a back seat. Few observers had anticipated the scale of selling by long-term holders, who took profits, accentuating the downward pressure on bitcoin in the final quarter of 2025.

In contrast, gold emerged as the great safe haven of the year. It fully played its role as a hedge against geopolitical risks, outperforming all other asset classes. Global residential property, meanwhile, continued to grow, despite a tense macroeconomic environment.

At the end of the day, allocation choices primarily reflect investors' appetite for risk. Digital assets are at the riskier end of the spectrum. When liquidity and flow conditions are not met, the sector as a whole suffers sharp corrections. Conversely, tangible assets occupy a central place in portfolios during periods of currency depreciation.

However, bitcoin and other crypto-assets generally remain confined to modest weightings in institutional portfolios, most often below 20%, due to their high volatility and sensitivity to the macroeconomic context.

Finally, it is worth remembering a key point: past performance is no guarantee of future performance. While exposure to digital assets can be penalising in an unfavourable environment, a total absence can prove just as costly when the cycle turns.

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