Swensen Portfolio

This is the portfolio David Swensen (manager of the Yale endowment) recommends for individual investors in his book Unconventional Success.

 

sernsen-portfolio

Asset Allocation

Stocks

Domestic

  • 30% Total Stock Market

International

  • 15% World Total Stock Market ¹
  • 5% Emerging Markets

Bonds

  • 30% Intermediate Term Bonds ²

Real Assets

  • 20% REITs ³

 

Notes

1) The calculations assume that US investors use a World Ex-US fund while investors living in other countries use a World fund including the US.

2) Swensen specifically calls for 15% TIPS as part of the bond portion of the portfolio.  I don’t have good data for that asset, so I added it to the overall IT bond allocation.  Be sure to read Swensen’s explanation for why he chooses the assets he does.

3) The data is based on USA REITs, but a broad global REIT fund is also a reasonably close alternative if no US fund is available.

David Swensen is most famous for his role as chief investment officer of the Yale Endowment, and that often causes confusion when people talk about the “Yale Portfolio”.  The Yale Endowment manages billions of dollars and invests in all kinds of exotic assets only available to large institutions.  The portfolio here is different and is Swensen’s recommendation to people like you and me.  /// More Info ///