Swensen Portfolio 10-Year Trailing Returns Redux

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Here is a check-in on the trailing 10-year total returns for the David Swensen model portfolio, courtesy of ETFPM.com. Last update was in 2011. As a reminder, here is the model portfolio asset allocation with representative ETFs:

30% Domestic US Equity (VTI)
15% Foreign Developed Equity (VEA)
10% Emerging Markets (VWO)
15% Real Estate (VNQ)
15% U.S. Treasury Bonds (IEF)
15% Inflation-Protected Securities (TIP)

The chart below shows the growth of $1,000 invested this way and rebalanced annually (eMAC), starting from January 2003 until the end of March 2013. eMAC stands for “efficent multi-asset class”.

Again, we see that this low-cost, diversified index fund portfolio (+169%) has done well over the last 10.3 years, besting the S&P 500 (+118%) handily as well as the Dow Jones Credit Suisse Hedge Fund Index (not shown anymore, but +95% roughly). We also see that a 30% Stock, 70% Long-term Treasury bond portfolio does pretty well, but I tend to dismiss that as rearview-mirror investing. Yes, looking backward it did well, but I doubt you could find any portfolio manager telling their clients to hold 30% Stocks and 70% Long-Term Treasuries as a long-term portfolio during the period between 2003-2007.

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  1. My portfolio over almost the same period is actually pretty darn similar to this (basically Total Bond Market in place of the Treasury Bonds and a little less REIT), so I’m happy to see it fared so well.

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