These portfolios by no means attempt to find the ideal asset allocation for everyone. Depending on your financial situation, the weightings of the assets could be very different. I am simply using these as a standard in order to compare the alternative portfolios.
World Beta 5 Asset Class Portfolio
25% US Stocks (VTI)
25% Foreign Stocks (EFA)
30% US Bonds (AGG)
10% Real Estate (VNQ)
10% Commodities (GSP)
100%
The risk parity portfolio simply uses the extra capital freed up from leverage to place more money into bonds. . .
World Beta 5 Asset Class Risk Parity Portfolio
25% US Stocks (ULPIX) ie only allocate 12.5% of funds to ULPIX as it is 2:1 leveraged
25% Foreign Stocks (UNPIX) ditto
55% US Bonds (AGG)
10% Real Estate (VNQ)
10% Commodities (GSP)
125%
In this case, the extra capital is allocated to portable alpha.
World Beta 5 Asset Class Portable Alpha Portfolio
25% US Stocks (ULPIX) ie only allocate 12.5% of funds to ULPIX as it is 2:1 leveraged
25% Foreign Stocks (UNPIX) ditto
30% US Bonds (AGG)
10% Real Estate (VNQ)
10% Commodities (GSP)
25% World Alpha (10 Holdings)
125%
And just to show how larger portfolios of world betas might look, 10 & 20 holdings:
World Beta 10 Asset Class Portfolio
12.5% US Large Cap (IWD)
12.5% US Small Cap (BRAIX)
12.5% Foreign Developed (EFA)
12.5% Foreign Emerging (EEM)
7.5% US Govt Bonds (1-3) (SHY)
7.5% TIPS (TIP)
7.5% Foreign Bonds (unhedged) (PFBDX)
7.5% Emerging Bonds (FNMIX)
10% Real Estate (VNQ)
10% Commodities (GSP)
100%
World Beta 20 Asset Class Portfolio
7.5% US Large Cap (IWD)
7.5% US Small Cap (BRAIX)
5% US Micro Cap (PZI)
5% Private Equity (PSP)
10% Foreign Developed (VHGEX)
7.5% Foreign Small Cap (RISIX)
7.5% Foreign Emerging (EEM)
4% US Govt Bonds (1-3) (SHY)
4% Bank Loans (FFRHX)
4% Mortgage (TGLMX)
4% Municipals (FTABX)
3% TIPS (TIP)
3% High Yield Corporate (VWEHX)
4% Foreign Bonds (unhedged) (PFBDX)
4% Emerging Bonds (FNMIX)
5% Real Estate (VNQ)
5% International Real Estate (RMR)
2% Timber (PCL)
2% Precious Metals (GLD)
6% Commodities (GSP)
100%
And lastly, a 50/50 allocation to World Beta 20 and World Alpha.
World Beta 20 and World Alpha
100%
