The Ideal Index Portfolio is profiled in Frank Armstrong’s book The Informed Investor: A Hype-Free Guide to Constructing a Sound Financial Portfolio.
It leans slightly toward value stocks over growth and is equally weighted between the US and international equities.
The portfolio holds 62% in equities, 30% in bonds, and 8% in REITs.
Weight | Ticker | ETF Name | Sector | |
|---|---|---|---|---|
31% | VEU | Vanguard FTSE All-World ex-US | Equity, Global ex-US, Large Cap | |
30% | BSV | Vanguard Short-Term Bond ETF | Bond, U.S., Short-Term | |
9.25% | IWD | iShares Russell 1000 Value ETF | Equity, U.S., Large Cap, Value | |
9.25% | IWN | iShares Russell 2000 Value ETF | Equity, U.S., Small Cap, Value | |
8% | VNQ | Vanguard Real Estate Index Fund ETF | Real Estate, U.S. | |
6.25% | SPY | SPDR S&P 500 ETF | Equity, U.S., Large Cap | |
6.25% | IWO | iShares Russell 2000 Growth ETF | Equity, U.S., Small Cap, Growth |
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Low | Average | High | |
|---|---|---|---|
1-Year | -34.1% | 7.7% | 44.9% |
3-Year | -9.4% | 7.3% | 20.9% |
5-Year | -1.5% | 7.0% | 16.2% |
10-Year | 2.8% | 6.9% | 10.3% |
Portfolio | 60/40 | S&P 500 | |
|---|---|---|---|
Annual Return | 7.0% | 9.3% | 10.3% |
10Y Annual Return | 5.3% | 7.9% | 12.2% |
Sharpe Ratio | 0.47 | 0.51 | 0.43 |
Max Drawdown | -40.1% | -29.7% | -50.97% |
Volatility (annualized) | 11.0% | 9.9% | 15.4% |
Dot Com Annual Return | -4.6% | -4.2% | -14.60% |
Great Financial Crisis Annual Return | -1.1% | -0.3% | -5.66% |
Positive Periods | 65.9% | 65.8% | 63.3% |
**S&P 500 backtest to 1972 and 60/40 backtest to 1970
