The Global Asset Allocation (GAA) Portfolio was developed by Meb Faber and profiled in his book Global Asset Allocation.
The premise behind the portfolio is US investors have a strong home country bias and that prevents them from investing in the global economy.
The portfolio is intended to correct that mistake by allocating to global ETFs.
It invests 36% in equities, 49.5% in bonds, and 14.5% in gold, REITs, and commodities.
Weight | Ticker | ETF Name | Sector | |
|---|---|---|---|---|
19.8% | LQD | iShares iBoxx $ Investment Grade Corporate Bond ETF | Bond, U.S., All-Term | |
18% | SPY | SPDR S&P 500 ETF | Equity, U.S., Large Cap | |
14.4% | BNDX | Vanguard Total International Bond ETF | Bond, International, All-Term | |
13.5% | EFA | iShares MSCI EAFE ETF | Equity, Inter. Developed, Large Cap | |
13.5% | TLT | iShares 20+ Year Treasury Bond ETF | Bond, U.S., Long-Term | |
5% | DBC | Invesco DB Commodity Index Tracking Fund | Commodity, Diversified | |
5% | GLD | SPDR Gold Trust | Commodity, Gold | |
4.5% | EEM | iShares MSCI Emerging Markets ETF | Equity, Emerging Markets, Large Cap | |
4.5% | VNQ | Vanguard Real Estate Index Fund ETF | Real Estate, U.S. | |
1.8% | TIP | iShares TIPS Bond ETF | Bond, U.S., All-Term |
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Low | Average | High | |
|---|---|---|---|
1-Year | -21.7% | 7.2% | 29.8% |
3-Year | -2.4% | 7.2% | 17.6% |
5-Year | 2.2% | 7.0% | 13.0% |
10-Year | 3.8% | 7.2% | 9.5% |
Portfolio | 60/40 | S&P 500 | |
|---|---|---|---|
Annual Return | 7.2% | 9.3% | 10.3% |
10Y Annual Return | 4.7% | 7.9% | 12.2% |
Sharpe Ratio | 0.65 | 0.51 | 0.43 |
Max Drawdown | -23.5% | -29.7% | -50.97% |
Volatility (annualized) | 7.8% | 9.9% | 15.4% |
Dot Com Annual Return | 2.4% | -4.2% | -14.60% |
Great Financial Crisis Annual Return | 3.3% | -0.3% | -5.66% |
Positive Periods | 67.6% | 65.8% | 63.3% |
**S&P 500 backtest to 1972 and 60/40 backtest to 1970
