Allocation Framework: how much % of NAV should domains take?
A 3-tier model (Core / Satellite / Speculative) for personal portfolios from $50K to $1M. Why top US family offices are allocating 2-5% to domains.
How much of a personal portfolio should sit in domain names? Based on family-office allocation surveys and stress-tested against 24 months of NameBio data, we propose a 3-tier model that scales from $50K to $1M individual portfolios. Premium US family offices currently allocate 2-5% of NAV to domains. The framework below explains why.
The 3-tier model: Core / Satellite / Speculative
Core (50% of domain sleeve). 1-3 word .com generic, 3-4 letter .com, premium Geo (.vn, .com.vn for Vietnamese investors). Hold-period 5-10 years. Expected appreciation 8-12%/year, low drawdown. This is the anchor.
Satellite (35%). Sector-specific premium (.ai, .io, .fund, .capital). Hold-period 3-5 years. Higher upside (15-25%/year in good cycles) but cycle-dependent.
Speculative (15%). New TLDs, expired drops, brandable plays. Hold-period 1-3 years. Binary outcomes — either 5-10x or near zero. Position sizing rule: any single name maximum 3% of portfolio.
Why family offices allocate 2-5% to domains
Three reasons. One: low correlation with public equity and bonds — domain prices follow technology adoption cycles, not interest rates. Two: tail-risk asymmetry — a quality 3-letter .com has bounded downside but unbounded upside if a strategic buyer emerges. Three: illiquidity premium — domains compensate investors for accepting 12-24 month time-to-exit.
The right question is not "Will domain names appreciate?" but "Are they uncorrelated enough to justify a 2-5% NAV allocation?" The data says yes.
Sizing the sleeve to your total NAV
For a $250K personal portfolio (typical Vietnamese mid-career investor), a 4% domain sleeve = $10K. Distributed by tier: Core $5K (1-2 names), Satellite $3.5K (1-2 names), Speculative $1.5K (3-5 names). For a $1M portfolio, the same framework applied = $40K sleeve, much more flexibility.
Brief #006 gives sector-level capital allocation within the domain sleeve. Brief #007 covers the seven valuation methods you'll need to deploy capital intelligently.
Frequently asked
Is 5% NAV in domains too aggressive for an individual?
For most investors, 2-3% is the recommended starting allocation. 5% is appropriate only when domains are a sleeve you genuinely understand — meaning you have read DOMAIN BRIEF for at least 6 months and made 3+ transactions with capital you can lose. Family offices reach 5% with multi-year experience and dedicated managers.
What if I cannot afford a Core name (3-letter .com is $50K+)?
Skip Core temporarily, run with 60% Satellite + 40% Speculative. As capital grows, redeploy proceeds into the first Core name when it can afford 30-50% of the domain sleeve. Many investors take 18-24 months to graduate to a Core position — that is normal.
How often should I rebalance the 50/35/15 split?
Annually. Domain sales and purchases incur friction (broker fees, time-to-close). Quarterly rebalancing is too costly. Annual review with rebalancing trigger of ±10 percentage points per tier is the sweet spot.
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