Difference between revisions of "Two-fund portfolio"

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(Created page with "A '''two-fund portfolio''' is often used by investors seeking a simple asset allocation portfolio. The portfolio consists of one equity index fund and one fixed income fund. T...")
 
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* A US intermediate term bond index fund/ETF
 
* A US intermediate term bond index fund/ETF
  
Ferri suggests a US total market bond index fund/ETF for the fixed income selection. However, investors can substitute a global bond index fund/ETF, a US intermediate-term bond index fund/ETF, a US intermediate-term treasury bond index fund/ETF, or a US municipal bond index fund/ETF for the fixed income allocation.
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Ferri suggests a US total market bond index fund/ETF for the fixed income selection. However, investors can substitute a global bond index fund/ETF, a US intermediate-term bond index fund/ETF, a US intermediate-term treasury bond index fund/ETF, or a US municipal bond index fund/ETF for the fixed income allocation. Investors may also find that employer-provided retirement plans will use [[Collective investment trust|collective investment trusts]] as investment vehicles.
  
 
The Ferri two-fund portfolio can be adjusted to reflect any stock/bond allocation. The charts below reflect different asset allocations.
 
The Ferri two-fund portfolio can be adjusted to reflect any stock/bond allocation. The charts below reflect different asset allocations.

Revision as of 14:16, 29 November 2019

A two-fund portfolio is often used by investors seeking a simple asset allocation portfolio. The portfolio consists of one equity index fund and one fixed income fund. The fund selections can vary depending on asset class (global equity or domestic equity; bond type), and asset type (mutual fund, exchange-traded fund, collective investment trust).

Global two-fund portfolios

Rick Ferri has proposed a two-fund portfolio consisting of the following asset classes:

  • A global stock market index fund/ETF
  • A US intermediate term bond index fund/ETF

Ferri suggests a US total market bond index fund/ETF for the fixed income selection. However, investors can substitute a global bond index fund/ETF, a US intermediate-term bond index fund/ETF, a US intermediate-term treasury bond index fund/ETF, or a US municipal bond index fund/ETF for the fixed income allocation. Investors may also find that employer-provided retirement plans will use collective investment trusts as investment vehicles.

The Ferri two-fund portfolio can be adjusted to reflect any stock/bond allocation. The charts below reflect different asset allocations.

Global two fund portfolio allocations

US only two-fund portfolios

Both John Bogle and Warren Buffett have suggested portfolios for investors who want to invest in US domestic stocks and bonds.

John Bogle two-fund portfolio

Warren Buffett two-fund portfolio

References