Like the flour and sugar in a well-stocked pantry, assets are the ingredients that are added in specific portions into your investing recipe.  Rather than looking at individual stocks, Portfolio Charts focuses on low-cost index funds that track a wide variety of popular indices.  Each index tracks hundreds or even thousands of securities, so a thoughtful investor can diversify their portfolio quite well by purchasing just a few index funds with minimum effort required.

The assets are grouped by high-level type: Domestic Stocks, International Stocks, Bonds, and Real Assets.  You’ll see the color codes repeated throughout the site as a visual guide to overall portfolio construction.  The Asset pages contain a high level overview, including a heat map that is handy for noting when the asset did very well and when it struggled.  In addition, you’ll find references to every portfolio on the site that uses that asset.

Perhaps most importantly, I’ve done my best to list a variety of index funds that best track the described asset.  These are the funds you’ll need to purchase when it comes time to build your own portfolio.  If that’s something that interests you but you’re not sure how it all works, here is a good place to start.

 

Source Data

The numbers behind the assets are a personal collection compiled from many reputable public sources and including a good number of my own calculations.  The goal is to present clean and accurate data free of fund-specific variables that can affect returns independent of normal market performance.  While these returns may not perfectly track the performance of your favorite fund every year, I’ve personally verified that every series reasonably models the intended market for general comparison purposes.  Returns for each year are calculated from the following sources:

 

Stocks: Portfolio Charts calculations (based on Fama-French source data), Fama-French, IIA, and small amounts of MSCI to fill in any gaps

Bonds: Portfolio Charts bond fund calculations based on central bank yield curve data

Cash: Average annualized 3-month Tbill rate from OECD

Inflation: OECD

Exchange Rates: Year-end rates from the US Federal Reserve

Gold: London Bullion Market

Other: REITs, commodities, and emerging markets use data from the Simba backtesting spreadsheet.  The ER is credited back to the return for consistency with other assets.

 

When good data all the way back to 1970 does not exist from any source, the calculations utilize similar-but-different replacement assets in order to provide valuable historical context.  I make use of an automatic error measurement system that verifies any portfolio utilizing replacement assets accurately models the desired design intent, and every chart clearly calls out when returns are only estimated.

 

Stock Index Definitions

All of the stock data adheres to the following standard definitions that are generally consistent with the methodologies of modern index providers:

Large Cap: Top 70% of market capitalization

Mid Cap: 70-85%

Small Cap: 85-100%

Value: The cheap half of the market sorted by book-to-market

Growth: The expensive half of the market sorted by book-to-market

Blend: The total market segment with no value or growth filter applied

Note that some index providers use slightly different naming conventions.  For example, CRSP calls the top 70% of the market “mega cap” and the top 85% of the market “large cap”.  By providing consistent non-overlapping indices, Portfolio Charts lets detail-oriented investors mix and match data sets to best model a particular fund.  But for most investors the standard definitions are just fine for general backtesting purposes.

 

Bond Index Definitions

The bond data consists of my own calculations based on historic yield curves provided by various central banks.  The maturity definitions are based on standard index methodologies:

Long Term: 10-30 years

Intermediate Term: 1-10 years

Short Term: 1-3 years

 

Fair Use

Portfolio Charts is educational in nature, and my goal is simply to help investors make informed choices.  In order to build simulated asset histories to model historical portfolio performance, I make use of a variety of public data freely found on the internet.  I respect copyright and take several proactive steps to honor the rights of data providers:

• Raw data is not available anywhere on the site.  Everything is transformed through inflation adjustments, exchange rates, portfolio weighting, and other calculations.

• Even with these transformations, the calculators are designed to prevent scraping of annual returns for individual assets.  The focus here is on blended portfolios, and I recommend that people look to the professionals for hard index data.

• I do not redistribute source data.  The Tools & Data section provides links to the same sources I use where you can download data for your own personal use.

If you have any questions, please contact me.  I take this seriously and will do everything I can to address any concerns.

 

Disclaimers

Never assume the data here is completely accurate.  Not only may there be a few mistakes in the numbers, but the historical data is also updated from time to time by the primary sources as more information becomes available.

All numbers have been modified from their original form, and nothing you see here will exactly track any particular real-world index.  The goal is simply to be reasonably accurate for general portfolio backtesting purposes.

All data is from 1970 to the present, which is the most freely available for such a wide variety of assets.  Past performance is no guarantee of future returns.

The asset returns ignore taxes and fees.  Fees vary by index fund, and taxes vary by location and individual.  Your own results may vary.

Every index fund is a little different — even ones ostensibly following the same index — and performance may vary due to things like construction methodology, fees, internal trading costs, taxes on distributions, and securities lending.

While I’ve taken great care to curate the funds listed for each asset, I do not promote any specific funds and I receive no money for listing them.  The list is not comprehensive and there may be other funds not shown that are also good options.  Also, it’s entirely possible some of the ones shown may not be an exact match for each index.  Please don’t take my word for it, and always thoroughly research any fund before you buy.

Long story short:

 

Always do your own research when selecting a fund to invest your own money.  I am not a financial adviser, and the information here is for educational purposes only.

 

If you spot an error, know of a fund that you think belongs on the list, want to see a new asset added to the site, or know of some good sources for data prior to 1970, please feel free to contact me.  My hope is to make this section as helpful and accurate as possible.