 |
Vanguard ETF: |  |
7.4%* |
|
Diversified Core: | |
8.1%* |
|
Six Core Asset ETFs: | |
7.3%* |
Articles on VISXX
- REIT and Commodities In Simple Six Fund Portfolio Shows Up Aronson's Lazy Portfolio
04/20/2011
The incidents in Japan, the Middle East and even as far back as New Orleans teach us the danger of living on borrowed time, the reactors, the governments the levees keeping things going -- just one more year. The temptation to delay until next time is very seductive until disaster strikes and the cost to repair, dwarfs the cost to prevent. Many working people put off their retirement investing -- just one more year until it becomes a "hair on fire" problem -- which it now is for baby boomers for whom retirement is a near and present danger.
We continue to examine luminary portfolios to see what we can learn and use to further our investment portfolios.
Ted Aronson and his AJO Partners manage about $25 billion of institutional assets. Aronson puts his family's taxable money in this well-diversified portfolio of no-load index funds.
Fund Weight Ticker ETF US Equities 40% VFINX, VEXMX, VISGX, VTSMX, VISXX VTI, TMW, VBK, VBR International Equity 20% VPACX, VEURX VEA Emerging Markets 10% VEIEX EEM US Bonds 30% VIPSX, VUSTX, VWEHX TIP, LQD, HYG
This is a well diversified four asset class portfolio with an aggressive profile. The US equities are broadly diversified. Asia Pacific is put above Europe for developed markets. There is a diversified set of fixed income with VWEHX and VUSTX being relatively high risk. The long term treasury bond has proved to be a good diversifier in recent history -- today all bonds are under pressure so this may be less true.
The US component is possibly over-weighted and emerging markets could be increased or, even better, some real estate assets could be added.This portfolio was last reviewed at the end of the year and we now re-examine performance over the last three months as we see markets changing and inflation becoming more of a present reality.
This lazy portfolio will be compared with six asset class SIB to examine the returns of four and six asset class portfolios
Portfolio Performance Comparison
Portfolio/Fund Name 1Yr AR 1Yr Sharpe 3Yr AR 3Yr Sharpe 5Yr AR 5Yr Sharpe Aronson Original 6% 74% 2% 14% 3% 16% Six Core Asset ETF Benchmark Tactical Asset Allocation Moderate 10% 71% 9% 73% 13% 91% Six Core Asset ETF Benchmark Strategic Asset Allocation Moderate 13% 103% 3% 20% 7% 35% full comparison
The Aronson portfolio has four asset classes missing out on REIT and commodities. The performance over the last five years has not been exceptional with the Simple SIB able to beat it across the board.Over the last three months, REIT and commodities have been in favor and having neither has had an impact on the Aronson returns.Takeaways- The Aronson lazy portfolio has moderate returns that can be beaten
- Having broader diversification pays off as market conditions change
- ETFs can readily be used to implement these portfolios with good performance
- A 10% spread over five years means that it’s worth looking at alternatives
Disclosure:MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.The incidents in Japan, the Middle East and even as far back as New Orleans teach us the danger of living on borrowed time, the reactors, the governments the levees keeping things going -- just one more year. The temptation to delay until next time is very seductive until disaster strikes and the cost to repair, dwarfs the cost to prevent. Many working people put off their retirement investing -- just one more year until it becomes a "hair on fire" problem -- which it now is for baby boomers for whom retirement is a near and present danger.
Exchange Tickers: (NYSE: VFINX), (NYSE: VEXMX), (NYSE: VISGX), (NYSE: VTSMX), (NYSE: VISXX), (NYSE: VTI), (NYSE: TMW), (NYSE: VBK), (NYSE: VBR), (NYSE: VPACX), (NYSE: VEURX), (NYSE: VEA), (NYSE: VEIEX), (NYSE: EEM), (NYSE: VIPSX), (NYSE: VUSTX), (NYSE: VWEHX), (NYSE: TIP), (NYSE: LQD), (NYSE: HYG)
- REIT and Commodities In Simple Six Fund Portfolio Shows Up Aronson's Lazy Portfolio
04/19/2011
The incidents in Japan, the Middle East and even as far back as New Orleans teach us the danger of living on borrowed time, the reactors, the governments the levees keeping things going -- just one more year. The temptation to delay until next time is very seductive until disaster strikes and the cost to repair, dwarfs the cost to prevent. Many working people put off their retirement investing -- just one more year until it becomes a "hair on fire" problem -- which it now is for baby boomers for whom retirement is a near and present danger.
We continue to examine luminary portfolios to see what we can learn and use to further our investment portfolios.
Ted Aronson and his AJO Partners manage about $25 billion of institutional assets. Aronson puts his family's taxable money in this well-diversified portfolio of no-load index funds.
Fund Weight Ticker ETF US Equities 40% VFINX, VEXMX, VISGX, VTSMX, VISXX VTI, TMW, VBK, VBR International Equity 20% VPACX, VEURX VEA Emerging Markets 10% VEIEX EEM US Bonds 30% VIPSX, VUSTX, VWEHX TIP, LQD, HYG
This is a well diversified four asset class portfolio with an aggressive profile. The US equities are broadly diversified. Asia Pacific is put above Europe for developed markets. There is a diversified set of fixed income with VWEHX and VUSTX being relatively high risk. The long term treasury bond has proved to be a good diversifier in recent history -- today all bonds are under pressure so this may be less true.
The US component is possibly over-weighted and emerging markets could be increased or, even better, some real estate assets could be added.This portfolio was last reviewed at the end of the year and we now re-examine performance over the last three months as we see markets changing and inflation becoming more of a present reality.
This lazy portfolio will be compared with six asset class SIB to examine the returns of four and six asset class portfolios
Portfolio Performance Comparison
Portfolio/Fund Name 1Yr AR 1Yr Sharpe 3Yr AR 3Yr Sharpe 5Yr AR 5Yr Sharpe Aronson Original 6% 74% 2% 14% 3% 16% Six Core Asset ETF Benchmark Tactical Asset Allocation Moderate 10% 71% 9% 73% 13% 91% Six Core Asset ETF Benchmark Strategic Asset Allocation Moderate 13% 103% 3% 20% 7% 35% full comparison
The Aronson portfolio has four asset classes missing out on REIT and commodities. The performance over the last five years has not been exceptional with the Simple SIB able to beat it across the board.Over the last three months, REIT and commodities have been in favor and having neither has had an impact on the Aronson returns.Takeaways- The Aronson lazy portfolio has moderate returns that can be beaten
- Having broader diversification pays off as market conditions change
- ETFs can readily be used to implement these portfolios with good performance
- A 10% spread over five years means that it’s worth looking at alternatives
Disclosure:MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.The incidents in Japan, the Middle East and even as far back as New Orleans teach us the danger of living on borrowed time, the reactors, the governments the levees keeping things going -- just one more year. The temptation to delay until next time is very seductive until disaster strikes and the cost to repair, dwarfs the cost to prevent. Many working people put off their retirement investing -- just one more year until it becomes a "hair on fire" problem -- which it now is for baby boomers for whom retirement is a near and present danger.Symbols: VFINX, VEXMX, VISGX, VTSMX, VISXX, VTI, TMW, VBK, VBR, VPACX, VEURX, VEA, VEIEX, EEM, VIPSX, VUSTX, VWEHX, TIP, LQD, HYG
