The Core Four Portfolio by Rick Ferri invests in four fundamentally unique asset types that are productive both on their own and as a group.
Asset Allocation
Change the home country to translate the portfolio to local asset options.
| % | Asset Class |
|---|---|
| 48% | United States Large Cap Blend Stocks |
| 24% | Developed ex-US Large Cap Blend Stocks |
| 20% | United States Intermediate Term Treasury Bonds |
| 8% | United States Real Estate Investment Trusts |
Other Versions
Rick Ferri offers several different versions of the Core Four Portfolio depending on your needs and preferences. The one described here is the original version that he now calls the Classic Core-4. A few other versions like the Total Economy Core-4 and Global Markets Core-4 can be easily modeled in the Portfolio Charts tools as well.
Author
Rick Ferri
Rick Ferri is a financial adviser and investing author. You can read about the Core Four portfolio at Core-4.com, and learn about his investing philosophy in his book All About Asset Allocation.
Overview
Rick Ferri has long been a vocal champion of low-cost DIY investing, and the Core Four Portfolio represents his best advice for people who want to escape high fees and complex asset allocations. In his own words:
Simple investing is a virtue – the ultimate in portfolio sophistication. A few low-cost, broadly diversified index funds or ETFs held in a portfolio will beat complex strategies almost every time. Why waste your time and money on complexity? Be simple and be rewarded.
The four assets in the Core Four are selected based on the following characteristics:
- All have an economic purpose that is fundamentally different from each other.
- All produce regular cash-flow from interest, dividends or rents.
- The historic correlations between asset classes have resulted in a diversification benefit.
- All asset classes can be purchased using a very-low cost index fund or ETF.
A notable part of Ferri’s philosophy is evident in the juxtaposition of points 2 and 3. While some portfolios select assets primarily for how they affect overall performance as a group, Ferri believes that they should also stand on their own with regular cash-flow.
The Core Four Portfolio does a nice job of distilling several similar portfolios down to their simplest form, and is a good choice for investors seeking a solid financial foundation with low fees and minimum complexity.
Performance
Calculations use localized assets and data for the selected home country.
Comparisons
Calculations use localized assets and data for the selected home country.
Learn more about the metrics on the Portfolio Matrix page.
Alternatives
Portfolios with a similar structure or design intent
Ideal Index Portfolio — Similar structure with a few more stock funds
No-Brainer Portfolio — Shares a common philosophy with a different 4th fund
Pinwheel Portfolio — Builds on the Core-4 assets with performance-augmenting tweaks
Articles
Insights that mention the Core Four Portfolio
Discussion
Join the conversation
