William Bernstein Smart Money
0.93%May 02 | MyPlanIQ portfolio symbol P_20738

  • Portfolio Overview
  • Asset Allocation and ETFs
  • Performance
  • Calculators
  • Rolling Returns
  • Drawdowns

Portfolio Overview


Background Information on the Author and Philosophy

The William Bernstein "Smart Money" Lazy Portfolio is a one of Bernstein's lazy portfolios that people constructed based on his writings.

The "Smart Money" is also pretty balanced in terms of its allocations to US stocks, internaitonal stocks, emerging market stocks and bonds. It's a 60% stocks 40% bonds portfolio.

Asset Allocation and Holdings Analysis

Asset Allocation Breakdown:
  • US Equity (25%) :
    • VTSMX (Total Stock Market): Broad exposure to the entire U.S. stock market.
  • International Equity (25%) :
    • VGTSX (Vanguard International Stock Index Fund)
  • Emerging Market Equity (10%) :
    • VEIEX (Emerging Markets): Exposure to developing economies.
  • Fixed Income (40%) :
    • VFSTX (Short-Term Investment-Grade Bonds): Low-risk bond fund providing stability and liquidity.
Diversification:

This portfolio achieves excellent diversification across asset classes, geographies, and investment styles:

  • Equity Diversification: It spreads across US stocks, international developed market stocks and emerging market stocks
  • Balanced: Its bond exposure is in short term investments, which seems to be a bit conservative
Pros and Cons:
  • Pros :
    • Simple and easy to maintain.
    • Low-cost index funds reduce fees.
    • Broad diversification reduces unsystematic risk.
    • Suitable for hands-off investors who prefer minimal rebalancing.
    • Fixed-income cushion provides stability during market downturns.
  • Cons :
    • Conservative bond-heavy allocation may limit growth potential for younger investors.
    • Emerging markets exposure is sizable (10%) that could increase volatility.
    • Short-term bond fund might reduce some extra gains from fixed income.

3. Application for Retirement Investors (401(k) and IRA)

The following shows how to apply the William Bernstein Smart Money lazy portfolio to retirement accounts,

For 401(k) Accounts:

Many employer-sponsored 401(k) plans offer a selection of mutual funds or target-date funds, but they may not include all the exact funds listed in the Smart Money Lazy Portfolio. Here's how an investor can approximate the holdings:

  1. US Equity Funds :
    • Look for total stock market index funds or S&P 500 index funds as substitutes for VTSMX.
  2. International Equity Funds :
    • Search for international or global stock funds. Prefer low cost index funds. Make sure it's diversified if it's an actively managed international fund.
  3. Fixed Income :
    • Most plans will have short-term bond funds or intermediate-term bond funds as alternatives to VFSTX.
  4. Rebalancing :
    • Set up automatic contributions to mirror the target weights as closely as possible.
    • Rebalance annually or semi-annually when permitted by the plan administrator.
For IRAs:

IRAs typically offer greater flexibility, allowing direct purchase of Vanguard funds or equivalent ETFs. An investor could replicate the portfolio exactly using the specified funds or their ETF equivalents (e.g., VTI for VTSMX). Online brokerage platforms like Fidelity, Schwab, or Vanguard make it straightforward to implement this strategy.

Summary

The Bernstein Smart Money Lazy Portfolio works best for people who want something steady and hands-off. It's simple four fund portfolio is good enough for most average investors. Make sure to scale up or down of your stock exposure based on your age, your return expectation and your financial situation.

Click here for more portfolio details and features ►

Asset Allocation


Symbol Category/Sector Target Weight
VTSMX
VANGUARD TOTAL STOCK MARKET INDEX FUND INVESTOR SHARES 		US Equity 25%
VEIEX
VANGUARD EMERGING MARKETS STOCK INDEX FUND INVESTOR SHARES 		International Equity 10%
VGTSX
VANGUARD TOTAL INTERNATIONAL STOCK INDEX FUND INVESTOR SHARES 		International Equity 25%
VFSTX
VANGUARD SHORT-TERM INVESTMENT-GRADE FUND INVESTOR SHARES 		Fixed Income 40%


Historical Performance


The return data shown below all delayed by 3 months. Their latest dates are all the same: 02/28/2025.
AR inception is since 12/31/1999.
Name YTD Return 1Yr AR 3Yr AR 5Yr AR 10Yr AR 15Yr AR 20Yr AR Inception
William Bernstein Smart Money 1.95% 9.75% 4.95% 6.90% 5.59% 6.12% 6.00% 5.50%
VFINX (VANGUARD 500 INDEX FUND INVESTOR SHARES) 1.42% 18.88% 12.39% 16.78% 12.80% 13.83% 10.34% 7.65%
VSMGX (VANGUARD LIFESTRATEGY MODERATE GROWTH FUND INVESTOR SHARES) 2.49% 11.09% 5.14% 7.38% 6.01% 7.04% 5.95% 5.44%

William Bernstein Smart Money Return Calculator

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Calculators


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Rolling Returns


From 12/31/1999 to 05/02/2025, the worst annualized return of 3-year rolling returns for William Bernstein Smart Money is -7.33%.

From 12/31/1999 to 05/02/2025, the worst annualized return of 5-year rolling returns for William Bernstein Smart Money is 0.13%.

From 12/31/1999 to 05/02/2025, the worst annualized return of 10-year rolling returns for William Bernstein Smart Money is 3.94%.


Maximum Drawdown

William Bernstein Smart Money Maximum Drawdown