Core Four Portfolio

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Core four portfolio is popularized by Rick Ferri. He mentioned the portfolio on Boglehead Forum.
This lazy portfolio is a buy-and-hold portfolio that contains a healthy allocation to US stocks, international stocks, REIT, and bonds.

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 Core Four Portfolio

The rules of Core Four Portfolio is simple. It invests its 60% allocation to stocks and 40% to bonds. It mainly invest in US, international stock, REIT, and bond market.
Core Four Portfolio

This 4 fund portfolio is well like by followers in Bogleheads.

The portfolio can be applied with an investment in a low cost US total stock market index fund, along with direct investments in US, international stock, REIT, and bond market. It can also be implemented with low-cost ETFs (exchange-traded funds).

How to Invest

You can invest in this Core Four portfolio through Vanguard mutual funds or Vanguard ETFs (Exchange Traded Funds).
Below are the list. You can buy these investment funds through your brokerage.

Vanguard Mutual Funds

  • Vanguard Total Bond Market Index Fund (VBMFX) - 40%
  • Vanguard Total Stock Market Index Fund (VTSMX) - 30%
  • Vanguard Total International Stock Index Fund (VGTSX) - 24%
  • Vanguard REIT Index Fund (VGSIX) - 6%

Vanguard ETFs

  • Vanguard Total Bond Market ETF (BND) - 40%
  • Vanguard Total Stock Market ETF (VTI) - 30%
  • Vanguard Total International Stock ETF (VXUS) - 24%
  • Vanguard REIT ETF (VNQ) - 6%

Performance overview

The Core Four portfolio is considered as moderate allocation 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 Core Four portfolio has returned 4.26 percent over the three years, and 7.53 percent over the past five years. The past 5 years performance is as follows:
YearCore Four
20077.14%
2008-20.83%
200920.62%
201012.08%
20110.48%
201212.02%
201312.84%
20146.77%
2015-0.53%
20166.53%

Pros and Cons of Core Four portfolio

Pros:
  • The fund is well balanced with exposure to US stock, International stock, and real estate.
  • The investment portfolio has generate consistent returns for the past decade.
Cons:
  • Might not as diversified as other expected.
Core Four Portfolio Returns

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