The Aronson Family Taxable Portfolio: A Quietly Interesting Lazy Strategy for Taxable and Retirement Accounts
Ted Aronson probably doesn’t ring a bell for most casual investors. But he’s well-known in the institutional world — ran AJO Partners, a quant shop that managed billions before winding down. What’s maybe more interesting (at least for individual investors) is that he publicly shared the investment strategy used in his own family’s taxable account. That’s rare. Most pros don’t talk about their own money.
Anyway, his family’s portfolio got picked up by Paul Farrell at MarketWatch, and since then it’s been tracked as part of their “lazy portfolio” series. Even though it holds more funds than most lazy portfolios, it still fits the spirit — broad diversification, low maintenance, no need to guess what markets are going to do next.
The portfolio was designed for taxable accounts, but honestly it works just as well in an IRA or 401(k) with a few tweaks. We’ll get into that.
Aronson Family Taxable Portfolio Holdings
Here’s how the portfolio breaks down:
- 70% stocks / 30% bonds
- 11 funds total, covering U.S., international, emerging markets, and various bonds
Breakdown:
- 20% VEIEX (Emerging Markets)
- 15% VFINX (S&P 500)
- 15% VPACX (Pacific Stocks)
- 10% VEXMX (Extended Market — mid/small cap US)
- 10% VIPSX (TIPS — inflation-protected bonds)
- 5% VEURX (European Stocks)
- 5% VWEHX (High-Yield Corporate Bonds)
- 5% VUSTX (Long-Term Treasuries)
- 5% VISGX (Small Cap Growth)
- 5% VISVX (Small Cap Value)
- 5% VTSMX (Total US Market)
So yes, more holdings than most lazy portfolios. But that’s not necessarily a bad thing. It’s still simple to manage — just takes a bit more setup up front.
Asset Allocation Notes
This portfolio covers almost everything. You’ve got U.S. stocks in all sizes and styles. International developed is split into Europe and Pacific, which is a bit unusual (most people use a single international fund). Emerging markets have their own big allocation (20%), which gives this portfolio a lot of global exposure.
On the bond side, you get a mix — long-term Treasuries for safety and deflation hedge, TIPS for inflation protection, and some high-yield corporate bonds for income. It’s not just “bonds for ballast” — each one plays a role.
There’s a tilt toward growth and small caps, plus heavy international exposure. It’s definitely not a plain vanilla 60/40.
That said, it’s not too aggressive either. 70% equity, 30% fixed income is reasonable for a long-term investor. It has some volatility, sure. But nothing outrageous. Probably not a great fit for someone retiring next year. But for most working investors, it’s fine.
How to Use This in a 401(k) or IRA
In a 401(k)
Not every 401(k) will have all these options. But here’s a rough guide:
- VTSMX / VFINX / VEXMX / VISGX / VISVX: Just use a total U.S. market fund, or if needed, S&P 500 + a small/mid cap fund
- VEIEX / VEURX / VPACX: Use a total international fund if possible. If you can split it into developed/emerging, even better
- VIPSX: Look for a TIPS fund
- VUSTX: Use a long-term Treasury fund, or if that’s not available, intermediate is fine
- VWEHX: Look for a high-yield bond or income fund, but double check fees and credit quality
Rule of thumb:
- For stocks, favor index funds (low cost, broad exposure)
- For bonds, use core bond funds or high-quality total return bond funds — this page can help find them
If something isn’t available, just map to the broader asset class. Small-cap value missing? Just use U.S. small-cap. No TIPS? Use your regular bond fund. No Pacific or European fund? Use total international.
In an IRA
Much easier here. Just build it directly with ETFs:
- VWO for emerging markets
- VOO for S&P 500
- VPL for Pacific
- VXF for extended market
- TIP for TIPS
- VGK for Europe
- JNK for high yield
- VGLT for long-term Treasuries
- VBK and VBR for small cap growth/value
- VTI for total market
Put the bond-heavy or income-heavy stuff (like TIP, VGLT, JNK) in the IRA side if possible. Leave the equity ETFs in your taxable account — they’re more tax-efficient.
Final Notes
This is a thoughtful, globally diversified, slightly quirky portfolio. Not cookie-cutter. But not overly complicated either.
It’s a good fit for people who want more exposure than a typical 3-fund portfolio gives you, but still want something passive and relatively easy to maintain. Probably best for folks with moderate risk tolerance — not too conservative, not overly aggressive.
Annual rebalancing should be enough. Semi-annual if you really want to be precise. Either way, don’t overdo it.