Portfolio Design Labs, LLC

Portfolio Design Labs, LLC is a SEC-registered investment advisory firm based in Chandler, Arizona. Founded by Derek Prusa, the firm operates at the intersection of quantitative portfolio engineering and wealth management, emphasizing systematic, research-driven approaches to multi-asset allocation. The firm's name itself signals its orientation — treating portfolio construction as a disciplined design exercise grounded in empirical analysis and structured methodology rather than discretionary intuition or narrative-driven stock picking. Portfolio Design Labs files quarterly 13F disclosures with the SEC under CIK #0002010278, with its initial filings beginning in approximately 2022, positioning it as a relatively recent entrant to the public disclosure landscape. Despite the compressed filing history, the firm's disclosed holdings provide a transparent window into its systematic allocation framework and evolving positioning across asset classes. The firm operates within Arizona's growing financial services ecosystem, serving a client base that includes high-net-worth individuals and potentially other advisory firms seeking outsourced portfolio management — a model consistent with the turnkey asset management platform (TAMP) or sub-advisory structure that has become increasingly prevalent in the independent advisory channel.

Portfolio Design Labs employs a systematic, rules-based investment methodology that prioritizes asset allocation architecture over individual security selection. The firm's 13F Portfolio Composition is heavily oriented toward exchange-traded funds spanning multiple asset classes, geographies, and factor exposures, reflecting a structured approach to portfolio design that treats each ETF allocation as a purposeful building block within a broader strategic framework. The observable investment approach is distinctly multi-asset in nature. Rather than concentrating on individual equities selected through fundamental research, Portfolio Design Labs constructs portfolios from diversified ETF components that provide targeted exposure to specific market segments — domestic large-cap, small-cap, international developed, emerging markets, fixed-income proxies, and in some cases alternative or factor-based strategies. This mosaic approach to portfolio construction allows for precise control over portfolio-level risk characteristics, correlation profiles, and return driver diversification. The systematic dimension of the strategy is evident in the portfolio's compositional patterns across filings. Position weights and allocation shifts appear to follow structured methodologies rather than ad-hoc discretionary adjustments, suggesting the portfolio is governed by quantitative frameworks — potentially incorporating momentum signals, mean-reversion indicators, volatility targeting, or strategic rebalancing bands. The Sector Allocation History visible across quarterly disclosures reveals allocation shifts that appear calibrated and proportional rather than binary or speculative, consistent with a model-driven rebalancing process. Turnover falls into the moderate range — higher than passive buy-and-hold strategies but lower than high-frequency tactical rotation approaches. This moderate turnover is consistent with a rules-based framework that triggers rebalancing when predetermined thresholds are breached or when systematic signals indicate rotation is warranted. The cadence suggests quarterly or monthly review cycles rather than daily tactical adjustments, balancing responsiveness to changing market conditions with the cost and tax efficiency considerations that matter to wealth management clients. The ETF-centric portfolio construction also reflects a philosophical commitment to transparency and cost efficiency. By building portfolios from liquid, low-cost ETFs rather than opaque or high-fee investment vehicles, the firm aligns its implementation methodology with the interests of cost-conscious clients who prioritize net-of-fee outcomes. This approach is particularly well-suited to the TAMP or sub-advisory model, where portfolio construction must be scalable, replicable, and explainable across diverse client accounts. INVESTMENT RISK PROFILE The risk framework embedded in Portfolio Design Labs' portfolio construction methodology reflects a design-centric approach to risk management — engineering specific risk characteristics into the portfolio architecture rather than attempting to manage risk reactively after the fact. Several structural risk mitigation features are observable across the firm's disclosed filings. Multi-asset diversification serves as the foundational risk management mechanism. By distributing capital across ETFs representing different asset classes, geographies, and market segments, the portfolio systematically reduces dependence on any single return driver. This construction principle limits the Max Drawdown Depth attributable to concentrated sector or regional dislocations, distributing risk across partially uncorrelated return streams that can provide offsetting behavior during stress events. The Volatility Profile of the disclosed portfolio is shaped by the specific blend of asset class exposures active at any given time. During periods when the allocation favors defensive or income-oriented ETFs, portfolio-level volatility would compress toward the lower end of the equity spectrum. Conversely, periods featuring elevated allocations to growth equities, small-cap, or emerging market exposures would produce higher realized volatility. The systematic nature of the allocation process implies that these volatility shifts are intentional design decisions rather than accidental byproducts of drift, making the portfolio's risk characteristics interpretable through the lens of its governing allocation model. The firm's relatively recent filing history, beginning circa 2022, means the observable risk track record encompasses the tail end of the 2022 bear market and the 2023–2024 recovery — a period that tested multi-asset strategies through simultaneous equity and fixed-income drawdowns, a historically unusual environment that challenged traditional diversification assumptions. How the portfolio's systematic allocation framework responded to this period of correlated stress provides valuable diagnostic information about the adaptability and robustness of its underlying model. Model risk represents a consideration specific to systematic strategies like Portfolio Design Labs' approach. Rules-based frameworks, while removing emotional decision-making bias, introduce the risk of model overfitting, parameter fragility, or regime-dependent performance degradation. The degree to which the firm's allocation model has demonstrated stability and adaptability across the limited but eventful filing period is a key risk evaluation dimension. Historical replication through backtesting tools can provide empirical evidence of how the portfolio's systematic allocations have performed through realized stress events, offering data-driven risk assessment to complement qualitative evaluation of the underlying methodology.

Portfolio Design Labs occupies a distinctive position within the advisory landscape as a systematically oriented, ETF-based portfolio construction firm whose approach emphasizes disciplined allocation engineering over discretionary security selection. The Chandler, Arizona-based practice, founded by Derek Prusa, reflects the growing institutional sophistication of the independent advisory channel, where quantitative portfolio design methodologies previously associated with larger institutional managers are being applied to the wealth management and sub-advisory space. The firm's analytical profile centers on several key dimensions. The Annualized Return (CAGR) achievable through replication of the disclosed 13F positions, while based on a relatively compressed filing history, provides an initial measurement of compounding behavior generated by the firm's systematic multi-asset framework. Given the diversity of asset class exposures within the portfolio, this metric is most meaningfully evaluated against a blended benchmark that reflects the portfolio's actual geographic and asset class composition rather than a single equity index. The Sortino Ratio offers a particularly relevant efficiency metric for a rules-based strategy that ostensibly targets favorable asymmetry — capturing upside participation while systematically managing downside risk through allocation adjustments. This measure isolates whether the systematic framework delivers its intended purpose of producing superior risk-adjusted outcomes relative to static allocation alternatives, separating genuine model alpha from coincidental market exposure. The central diagnostic question for Portfolio Design Labs addresses the fundamental value proposition of systematic multi-asset allocation: across regimes characterized by varying correlation structures between equity and fixed-income asset classes — particularly the unprecedented positive equity-bond correlation environment of 2022 that challenged traditional diversification — does the firm's rules-based allocation framework demonstrate genuine adaptive capability that preserves portfolio integrity, or do its systematic signals exhibit lag and regime sensitivity that diminish the diversification benefits theoretically embedded in its multi-asset design?