Rick Ferri’s 60/40 Portfolio: Two Fund Portfolio

By
Rick Ferri’s 60/40 Portfolio is a well-known 2 fund portfolio. This 2 fund portfolio is a well-known lazy portfolio. Rick Ferri is well known investor professional among Boglehead.

Who is Rick Ferri?

Rick Ferri, also known as Richard Ferri, is a financial analyst, author, speaker, former adviser, and founder of Portfolio Solutions, LLC. He has written various financial articles.

Rules of Rick Ferri’s 60/40 Portfolio

The rules of Rick Ferri’s 60/40 Portfolio is simple. It invests its 60% allocation to world-wide stocks and 40% to bonds. It mainly invest in US, international stock, and bond market.

This portfolio is well like by followers in Bogleheads.

How to Invest

Rick Ferri’s 60/40 Portfolio: Two Fund PortfolioYou can invest in this Bogle’s 50-50 Portfolio through mutual funds or Exchange Traded Funds (ETFs). Below are the list. You can buy these investment funds through your brokerage.

Vanguard Mutual Funds

  • Vanguard Total Bond Market Index Fund (VBMFX)
  • Vanguard Total World Stock Index Fund (VTWSX)

Vanguard ETFs

  • Vanguard Total Bond Market ETF (BND)
  • Vanguard Total World Stock Index Fund (VT)

Performance overview

The 60/40 stock/bond portfolio is a well-balanced investment portfolio. It is often used as a simple benchmark for a balanced asset allocation. Traditionally, this portfolio mix has been shown to offer solid returns with a nice risk profile over the long-term.

This Ferri’s 60/40 Portfolio has returned 3.32 percent over the three years, and 7.76 percent over the past five years. The past 5 years performance is as follows:
  • Year 2016: 6.12%
  • Year 2015: -0.89%
  • Year 2014: 4.53%
  • Year 2013: 12.93%
  • Year 2012: 11.83%
Year100% Bond100% Stock60-40
20093.33%32.65%20.92%
20106.20%13.08%10.33%
20117.92%-7.50%-1.33%
20123.89%17.12%11.83%
2013-2.10%22.95%12.93%
20145.82%3.67%4.53%
20150.56%-1.86%-0.89%
20162.53%8.51%6.12%

Pros and Cons of Ferri’s 60/40 Portfolio

Pros:
  • The fund has lower risk than 100% stock funds.
  • The investment portfolio has generate consistent returns for the past decade.
Cons:
  • It may not as diversified as other funds.
Rick Ferri’s 60/40 Portfolio Performance

0 comments:

Post a Comment