Here Are The 20 Best Income Portfolios Built with ETFs for 2023
If you're looking for income then you should look at this list of the 20 best income portfolios.
What are the Dimensional Fund Advisors (DFA) portfolios?
The 5 DFA portfolios go all the way from holding 100% bonds to being fully exposed to equities at 100%. DFA’s portfolios can be built with 4 – 15 ETFs.
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What is the historical return for Dimensional Fund Advisors Investment portfolios?
Here is the historical return for DFA model portfolios when using our time series.
Portfolio data was last updated on 11th of August 2023, 08:35 ET
| Name | Year to date | Return in 2022 | 10 year return | CAGR since 1989 (%) | Draw Down | Expense ratio | Yield |
|---|---|---|---|---|---|---|---|
| Dimensional Fund Advisors Model Portfolios 0% Stocks Fixed | -0.1 | -10.45 | 0.64 | 3.78 | -12.22 | 0.06% | 1.88 |
| Dimensional Fund Advisors Model Portfolios 20% Stocks Conservative | 1.61 | -10.84 | 2.39 | 5.1 | -10.84 | 0.08% | 2.01 |
| Dimensional Fund Advisors Model Portfolios 40% Stocks Moderate | 3.32 | -11.23 | 4.09 | 6.31 | -12.31 | 0.10% | 2.15 |
| Dimensional Fund Advisors Model Portfolios 60% Stocks Normal | 5.03 | -11.63 | 5.73 | 7.4 | -21.5 | 0.12% | 2.28 |
| Dimensional Fund Advisors Model Portfolios 80% Stocks Agressive | 6.74 | -12.02 | 7.32 | 8.35 | -30.69 | 0.14% | 2.42 |
| Dimensional Fund Advisors Model Portfolios 100% Stocks Equity | 8.45 | -12.42 | 8.86 | 9.17 | -39.88 | 0.16% | 2.55 |
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 do the Dimensional Fund Advisors portfolios compare to the best portfolios?
Below you can see the returns of the best portfolios that we have benchmarked.
| Name | See Portfolio | Year to date | Return in 2022 | 10 year return | CAGR since 1989 (%) | Draw Down |
|---|---|---|---|---|---|---|
| Ben Stein Retirement | Coming soon! | 4.05 | -18.03 | 9.46 | 10.8 | -35.42 |
| Paul Merriman 4-Fund-Portfolio | Coming soon! | 9.22 | -11.98 | 11.25 | 10.38 | -35.26 |
| S&P 500 | Coming soon! | 17.09 | -18.19 | 12.52 | 10.28 | -37.63 |
| Paul Merriman Target Date Portfolio (25 year old) | Coming soon! | 6.63 | -13.08 | 8.28 | 10.2 | -36.46 |
| Scott Adams Dilbert Portfolio | Coming soon! | 10.87 | -18.75 | 7.0 | 10.19 | -44.88 |
| JL Collins, Simple Path To Wealth, Wealth Building Portfolio | Coming soon! | 16.6 | -19.51 | 12.08 | 10.19 | -37.0 |
| American Institute of Individual Investors (AAII) Portfolio | Coming soon! | 3.74 | -13.91 | 9.7 | 10.16 | -40.85 |
| Paul Merriman Target Date Portfolio (35 year old) | Coming soon! | 6.57 | -13.22 | 8.31 | 10.08 | -36.35 |
| Assetbuilder.com Portfolio 14 | Coming soon! | 6.95 | -16.94 | 7.59 | 9.99 | -37.91 |
| Balanced Portfolio 90/10 | Coming soon! | 14.83 | -18.87 | 11.03 | 9.84 | -32.78 |
Who is Dimensional Fund Advisors?
Dimensional Fund Advisors DFA is one of the most respected fund managers. They have Nobel laureates on their investment committee board.
Dimensional Fund Advisors(DFA) is a hugely successful mutual fund provider ($660 billion AUM). They provide access to their funds only through investment advisors. This means you cannot buy them through your brokerage.
We can however replicate the model portfolios using ETFs from iShares ETFs or Vanguard ETFs.
Description for Dimensional Fund Advisors Investment Portfolios
The Dimensional Fund Advisors methodology is weighted towards value and small-cap. This is no surprise as two of the investment committee members of DFA are Eugene Fama and Kenneth French. They pioneered the model for describing asset class premia.
Value and small-cap are two asset classes that have the highest historical returns. The impact on investing by Fama cannot be understated and is eloquently detailed in The Myth of the Rational Market by Justin Fox.
DFA is the room filled with the people that invented modern finance.
We regularly see a comparison between DFA and Vanguard. Some are firm believers in DFA funds, while others are advocating Vanguard funds.
The issue stems from the fact that in some years, DFA funds have better returns, while in other years, Vanguard funds have higher returns.
If you want to dive deeper into this issue, see the below articles as a starting point:
https://www.altruistfa.com/dfavanguard.htm
https://www.ifa.com/articles/vanguard_dimensional_through_statistical_lens
https://andrewhallam.com/2018/05/the-dimensional-fund-advisors-versus-vanguard-battle/
DFA funds have higher expense ratios than Vanguard funds.
“The number of managers that can successfully pick stocks are fewer than you’d expect by chance. So, why even play that game? You don’t need to.”
– David Booth,Founder and Executive Chairman, DFA
The model portfolios as a template
The investment portfolios by Dimensional Fund Advisors serve as a starting point for portfolios creation by the advisors that use DFA funds. They are templates.
If you see an advisory firm that uses the DFA funds, there’s an excellent chance that the portfolios used are very similar to the DFA investment portfolios that we display on this page.
In particular, you can spot DFA portfolio inspiration if the portfolios contain the following asset classes:
A giveaway is the inclusion of the following asset classes:
- 2 Year Global Fixed Income
- 5 Year Global Fixed Income
- Emerging Markets Value
- International Small Cap Value
We very rarely see these asset classes apart from DFA-inspired portfolios.
How do you build Dimensional Fund Advisors Investment Portfolios With ETFs?
Dimensional Fund Advisors Model Portfolios 100% Fixed Income
- 25.00% 1 Year Fixed Income (BSV)
- 25.00% Intermediate-Term Treasuries (VGIT)
- 25.00% 2 Year Global Fixed Income (BNDX)
- 25.00% 5 Year Global Fixed Income (BND/BNDX)
Dimensional Fund Advisors Model Portfolios 20% Stocks Conservative
- 4.00% US Large Cap Value (VTV)
- 4.00% US Large Cap (VV)
- 2.00% US Small Cap Value (VIOV)
- 2.00% US Small Cap (VIOO)
- 2.00% International Developed (VEA)
- 1.00% International Small Cap Blend (VSS)
- 1.00% International Small Cap Value (DLS)
- 2.00% International Value (EFV)
- 0.60% Emerging Markets (VWO)
- 0.80% Emerging Markets Small Cap (EWX)
- 0.60% Emerging Markets Value (FNDE)
- 20.00% 1 Year Fixed Income (BSV)
- 20.00% Intermediate-Term Treasuries (VGIT)
- 20.00%2 Year Global Fixed Income (BNDX)
- 20.00%5 Year Global Fixed Income (BND/BNDX)
Dimensional Fund Advisors Model Portfolios 40% Stocks Moderate
- 8.00% US Large Cap Value (VTV)
- 8.00% US Large Cap (VV)
- 4.00% US Small Cap Value (VIOV)
- 4.00% US Small Cap (VIOO)
- 4.00% International Developed (VEA)
- 2.00% International Small Cap Blend (VSS)
- 2.00% International Small Cap Value (DLS)
- 4.00% International Value (EFV)
- 1.20% Emerging Markets (VWO)
- 1.60% Emerging Markets Small Cap (EWX)
- 1.20% Emerging Markets Value (FNDE)
- 15.00% 1 Year Fixed Income (BSV)
- 15.00% Intermediate-Term Treasuries (VGIT)
- 15.00% 2 Year Global Fixed Income (BNDX)
- 15.00% 5 Year Global Fixed Income (BND/BNDX)
Dimensional Fund Advisors Model Portfolios 60% Stocks Normal
- 12.00% US Large Cap Value (VTV)
- 12.00% US Large Cap (VV)
- 6.00% US Small Cap Value (VIOV)
- 6.00% US Small Cap (VIOO)
- 6.00% International Developed (VEA)
- 3.00% International Small Cap Blend (VSS)
- 3.00% International Small Cap Value (DLS)
- 6.00% International Value (EFV)
- 1.80% Emerging Markets (VWO)
- 2.40% Emerging Markets Small Cap (EWX)
- 1.80% Emerging Markets Value (FNDE)
- 10.00% 1 Year Fixed Income (BSV)
- 10.00% Intermediate-Term Treasuries (VGIT)
- 10.00%2 Year Global Fixed Income (BNDX)
- 10.00%5 Year Global Fixed Income (BND/BNDX)
Dimensional Fund Advisors Model Portfolios 80% Stocks Aggressive
- 16.00% US Large Cap Value (VTV)
- 16.00% US Large Cap (VV)
- 8.00% US Small Cap Value (VIOV)
- 8.00% US Small Cap (VIOO)
- 8.00% International Developed (VEA)
- 4.00% International Small Cap Blend (VSS)
- 4.00% International Small Cap Value (DLS)
- 8.00% International Value (EFV)
- 2.40% Emerging Markets (VWO)
- 3.20% Emerging Markets Small Cap (EWX)
- 2.40% Emerging Markets Value (FNDE)
- 5.00% 1 Year Fixed Income (BSV)
- 5.00% Intermediate-Term Treasuries (VGIT)
- 5.00%2 Year Global Fixed Income (BNDX)
- 5.00%5 Year Global Fixed Income (BND/BNDX)
Dimensional Fund Advisors Model Portfolios 100% Stocks Equity
- 20.00% US Large Cap Value (VTV)
- 20.00% US Large Cap (VV)
- 10.00% US Small Cap Value (VIOV)
- 10.00% US Small Cap (VIOO)
- 10.00% International Developed (VEA)
- 3.00% Emerging Markets (VWO)
- 10.00% International Value (EFV)
- 5.00% International Small Cap Blend (VSS)
- 5.00% International Small Cap Value (DLS)
- 4.00% Emerging Markets Small Cap (EWX)
- 3.00% Emerging Markets Value (FNDE)
Where can I learn more about Dimensional Fund Advisors Investment Portfolios?
We display a few providers on portfolioeinstein.com that uses the template offered by DFA. These include:
- Index Fund Advisors
- FPL Capital
- David Booth Model portfolios (he’s the Chairman of Dimensional Fund Advisors)
- Some of Dan Solin’s portfolios have similar characteristics. Dan Solin worked for Index Fund Advisors in the past.
Learn about DFA here (super intro to what investing is right on the front page).
They also have a youtube channel. It is updated regularly.
Suggestions for your next steps
If you have already committed to a portfolio then maybe you need help maintaining the portfolio. In this case 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.
