Build Meb Faber’s Portfolios With ETFs

What are Meb Faber’s portfolios?

The Meb Fabers Global Asset Allocation (GAA) portfolio is composed of 50% equities and 50% bonds. It is also exposed to gold and commodities.

Meb Faber has made several outstanding portfolios. You can, you can find ETF asset allocation as well as Performance for the many portfolios Meb Faber has constructed further below.

Article contents

What is the historical return of Meb Faber’s portfolios?

Portfolio data was last updated on 11th of November 2022, 11:40 ET

NameYear to dateReturn in 202110 year returnCAGR since 1989 (%)STDEVDraw DownExpense ratioYield
Meb Faber Ivy 5 Portfolio-13.7323.477.477.9211.39-31.51%0.22%2.29
Meb Faber Ivy 10 Portfolio-12.6620.116.558.1813.12-34.87%0.23%2.53
Meb Faber Risk Parity Portfolio-17.094.874.937.025.91-7.34%0.14%2.06
Meb Faber GTAA Conservative-15.5715.266.558.69.49-21.62%0.22%2.14
Meb Faber GTAA Moderate-13.721.37.329.0312.27-31.93%0.25%2.29
Meb Faber GAA-20.149.297.278.098.15-15.76%0.14%1.93
Meb Faber IVY 20 portfolio-12.4120.297.358.613.89-35.66%0.29%2.21
Performance for Meb Faber’s portfolios

Here is what the table is showing you

Year to date: This shows what the portfolio has returned this year starting from the first trading day of the year.

10 Year return: This shows the compounded annualized growth rate over a ten-year period. The current year is excluded from calculations.

CAGR since 1989: This shows the compounded annualized growth rate since 1989. The current year is excluded from calculations.

Expense ratio: This shows the cost of holding the portfolio if you were to construct the portfolio using the proposed ETFs.

Yield: This is the expected dividend yield of the portfolio.

Please note that past performance is not a guarantee of future returns.

How does Meb Faber’s portfolios compare to the best portfolios?

Below you can see the returns of the best portfolios that we have benchmarked.

NameSee PortfolioYear to dateReturn in 202110 year returnCAGR since 1989 (%)Draw Down
Premium PortfolioPremium-20.9732.1413.211.81-35.43%
Premium PortfolioPremium-18.728.7816.5211.28-37.63%
Premium PortfolioPremium-19.6425.6716.2911.25-37.00%
Premium PortfolioPremium-23.9913.4911.0311.21-44.87%
Premium PortfolioPremium-12.028.1714.4711.14-35.26%
Premium PortfolioPremium-14.924.7511.8510.99-36.46%
Premium PortfolioPremium-14.7929.0213.1510.99-40.85%
Premium PortfolioPremium-20.620.711.4510.93-37.91%
Premium PortfolioPremium-15.1224.5111.8710.88-36.35%
Premium PortfolioPremium-19.3822.9214.9910.85-32.77%
The 10 Best Performing Portfolios That We Have Benchmarked

What is the asset allocation for Meb Fabers portfolios?

Below you see the asset allocation for all of Meb Faber’s portfolios.

Meb Faber’s Global Asset Allocation Portfolio (GAA)

  • 18.00% US Large Cap (VV)
  • 4.50% REITs (VNQ)
  • 13.50% International Developed Blend (VEA)
  • 4.50% Emerging Markets(VWO)
  • 13.50% Long Term Treasuries (TLT)
  • 19.80% Corporate Bonds (LQD)
  • 5.00% Commodities (DBC / GSG)
  • 5.00% Gold (IAU)
  • 1.80% TIPS (VTIP)
  • 14.40% Non-US Bonds (BNDX)

Meb Faber’s Global Tactical Asset Allocation (GTAA) Conservative

  • 3.75% US Large Cap Value (VTV)
  • 3.75% US Small Cap Value (VIOV)
  • 15.00% REITs (VNQ)
  • 7.50% International Developed Blend (VEA)
  • 7.50% Emerging Markets (VWO)
  • 10.00% Long Term Treasuries (TLT)
  • 10.00% Intermediate-Term Treasuries (VGIT)
  • 10.00% Corporate Bonds (LQD)
  • 15.00% Commodities (DBC / GSG)
  • 10.00% Non-US Bonds (BNDX)
  • 7.50% Momentum Factor (MTUM)

Meb Faber’s Global Tactical Asset Allocation (GTAA) Moderate

  • 5.00% US Large Cap Value (VTV)
  • 5.00% US Small Cap Value (VIOV)
  • 20.00% REITs (VNQ)
  • 10.00% International Developed Blend (VEA)
  • 10.00% Emerging Markets (VWO)
  • 5.00% Long Term Treasuries (TLT)
  • 5.00% Intermediate-Term Treasuries (VGIT)
  • 5.00% Corporate Bonds (LQD)
  • 20.00% Commodities (DBC / GSG)
  • 5.00% Non-US Bonds (BNDX)
  • 10.00% Momentum Factor (MTUM)

Meb Faber’s Ivy 5 Portfolio

  • 20.00% US Total Stock Market (VTI)
  • 20.00% REITs (VNQ)
  • 20.00% International Developed Blend (VEA)
  • 20.00% Total US Bond Market (BND)
  • 20.00% Commodities (DBC / GSG)

Meb Faber’s Ivy 10 Portfolio

  • 10.00% US Large Cap (VV)
  • 10.00% US Small Cap (VIOO)
  • 10.00% REITs (VNQ)
  • 10.00% International Developed Blend (VEA)
  • 10.00% Emerging Markets (VWO)
  • 10.00% Total US Bond Market (BND)
  • 20.00% Commodities (DBC / GSG)
  • 10.00% TIPS (VTIP)
  • 10.00% International REITs (VNQI)

Meb Faber Ivy 20 portfolio

  • 5.00% US Large Cap (VV)
  • 5.00% US Mid Cap (IJH)
  • 5.00% US Small Cap (VIOO)
  • 5.00% US Micro-Cap (IWC)
  • 5.00% REITs (Real Estate) (VNQ)
  • 5.00% International Developed Blend (VEA)
  • 5.00% Emerging Markets (VWO)
  • 5.00% International Small Cap Blend (VSS)
  • 5.00% Total US Bond Market (BND)
  • 5.00% Timber (TREE)
  • 5.00% Infrastructure
  • 20.00% Commodities (DBC / GSG)
  • 5.00% TIPS (VTIP)
  • 5.00% Non-US Bonds (BNDX)
  • 5.00% Emerging Markets Small Cap (EWX)
  • 5.00% Emerging Market Bonds (VWOB)
  • 5.00% International REITs (Real Estate) (VNQI)

Meb Faber’s Risk Parity Portfolio

  • 7.50% US Total Stock Market (VTI)
  • 5.00% REITs (VNQ)
  • 7.50% International All-World ex-US (VEU)
  • 35.00% Intermediate-Term Treasuries (VGIT)
  • 35.00% Corporate Bonds (LQD)
  • 5.00% Commodities (DBC / GSG)
  • 5.00% Gold (IAU)

Who is Meb Faber?

Meb Faber (Mebane Faber) is a quant and productivity-meister galore who regularly backtests portfolios. In his fantastic book Global Asset Allocation: A Survey of the World’s Top Asset Allocation Strategies, he has collected a host of different portfolios playing on the same theme – well-diversified portfolios from some of the top money managers.

Global Asset Allocation: A Survey of the World’s Top Asset Allocation Strategies

His paper on tactical asset allocation A Quantitative Approach to Tactical Asset Allocation has revived trend-following. It is a fantastic primer on how to implement trend following into your portfolio. Trend following is not designed to deliver market-beating returns but instead to mitigate risk while delivering market-like returns.

His book The Ivy Portfolio: How to Invest Like the Top Endowments and Avoid Bear Markets shows how you can mirror the portfolios of the top-endowment funds like Yale and Harvard. You can check out our post Meb Faber’s Ivy 10 Portfolio: Expand And Conquer Yale And Harvard.

The Ivy Portfolio: How to Invest Like the Top Endowments and Avoid Bear Markets

We love Meb Faber around here. This is because he is a numbers guy who doesn’t seem to fret about the small stuff in investing. He keeps his horizon long and his feet very close to reality. He is not afraid to call people out on bullshit or dubious claims. He just seems relaxed about investing, surfs (yay!), and enjoys talking about asset classes, investing, and all that jive.

In the video below Mebane Faber talks at Google.

 

We have gotten a lot of good ideas from Meb Faber’s writings.

What strategy does Meb Faber like the best?

Meb Faber is also a fan of trend following, which he calls his “desert island” strategy. We here at Portfolioeinstein.com are also fans of trend following as a diversifier and a mitigator of risk. We have an article lined up about just that.

Much of Meb Faber’s work is all about figuring out how others have done well. His books, articles, and podcast reflect this. His book Invest With The House: Hacking The Top Hedge Funds looked at hedge fund strategies and proposed ways to mirror them.

Invest With The House: Hacking The Top Hedge Funds

What is special about Meb Faber’s portfolios?

Meb Faber uses two strategies in his portfolios. They are either market timing strategies (trend following) or globally diversified portfolios which span many asset classes. We do not currently track his excellent trend following strategy.

Meb Faber also has a definite bias towards value and momentum asset classes. Both of those have done great historically.

Meb Faber’s Ivy 20, for example, makes use of 20 asset classes!

in the video below Mebane Faber talks about his Trinity portfolio.

 

His Ivy league portfolios featured in The Ivy Portfolio: How to Invest Like the Top Endowments and Avoid Bear Markets are examples of his intent on broad diversification while keeping it simple. It is also a fantastic read by the way.

The Ivy Portfolio: How to Invest Like the Top Endowments and Avoid Bear Markets

What is market timing?

In his paper, A Quantitative Approach to Tactical Asset Allocation Meb Faber lays forward a tactical asset allocation strategy.

It may sound scary, but it is easily explained. However it just means that instead of having a buy-and-hold strategy like almost all of the portfolios on portfolioeinstein.com, the tactical portfolio changes its portfolio according to predetermined rules.

In Meb Faber’s tactical asset allocation portfolio, the changes are determined by a 10-month average.

For example: If the price of S&P500 is above its 10-month average, you should buy an S&P500 ETF. If it is below the 10-month average, you should sell.

Mebane Faber uses more than one asset class in his tactical portfolio, however, and I suggest you read his paper. It is straightforward to understand without the usual academic jargon, so it is accessible for most people.

One thing to remember about trend following is needed to highlight, which Meb Faber also stresses: Trend following is meant to decrease risk, not increase returns.

Meb Faber has included market timing in his most recent ETF offering – the Trinity portfolio ETF (TRTY).

Read Meb Faber’s paper on that here.

Where can I learn more about Meb Faber?

Meb Faber is the CEO and CIO of Cambria Investments.

Be sure to visit the Meb Faber website, where he often posts.

His podcast is often of excellent quality. The first three are like a mini-course on investing!

Meb Faber has written some excellent books. One of their chief qualities is they are without any fluff or padding you usually see in these books.

Suggestions for your next steps

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If you have already committed to a portfolio – good for you! If you need help maintaining the portfolio you will find our rebalance worksheet useful.

Rebalancing your portfolio lowers your risk and may provide higher returns in the long run. It is completely FREE.

You can find the rebalance worksheet in our article Here Is The Most Easy To Use Portfolio Rebalance Tool.

Rebalancing lowers your portfolio risk and can increase your returns.

What is the Ivy portfolio?

The Ivy portfolios are constructed by Meb Faber to mirror large endowments funds. It consists of five or ten ETFs

  • 20.00% US Total Stock Market (VTI)
  • 20.00% International Developed Stocks (VEU)
  • 20.00% US Total Bond Market (BND)
  • 20.00% US REITs (VNQ)
  • 20.00% Commodities (DBC)

What is a world allocation fund?

It is an attempt to mirror the entire world’s asset allocation. It includes all the world’s investable assets. You can read and see which ETFs to use here.