On the back of an announcement that PIMCO is launching a pure assets ETF, Mebane Faber’s got an interesting run-down of the structure and performance of several lazy portfolios. The thought process here is that theoretically, one could create a truly diversified portfolio with just 3 ETFs: stocks, bonds and now, assets.
This is Faber’s own Ivy Portfolio from The Ivy Portfolio: How to Invest Like the Top Endowments and Avoid Bear Markets
(from our book – note this is the B&H allocation not the tactical):
- 20% US Stocks
- 20% Foreign Stocks
- 20% Bonds
- 20% Commodities
- 20% REITs
Check out the post and returns, volatility, maximum drawdowns and Sharpe for some portfolios, including PIMCO’s El-Erian and Yale’s David Swensen.
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