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What is Rob Arnott’s portfolio?
Rob Arnott’s portfolio is a well-diversified portfolio with 8 asset classes. It holds 60% in bonds and has 10% allocated to commodities.
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What is the historical return of Rob Arnott’s portfolio?
Here is the historical return of Rob Arnott’s portfolio.
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 |
|---|---|---|---|---|---|---|---|
| Rob Arnott Portfolio | 2.5 | -13.63 | 3.44 | 6.81 | -14.71 | 0.17% | 2.83 |
| Rob Arnott ETF.com model portfolio | 2.75 | -12.89 | 3.59 | 7.07 | -16.69 | 0.21% | 3.3 |
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 Rob Arnott’s portfolio compare to the best portfolios?
Below you can see the returns of the best portfolios we 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 |
How do you build Rob Arnott’s portfolio with ETFs?
Here is how you build Rob Arnott’s portfolio with ETFs
- 10% Large Cap Blend (VOO)
- 10% Total International Stocks (VEA)
- 10% REITs (VNQ)
- 10% Commodities (DBC)
- 10% Long-Term Treasuries (TLT)
- 20% Intermediate Corporate Bonds (LQD)
- 10% TIPS (VTIP)
- 20% International Bonds (BNDX)
The letters in brackets denote the stock symbol for the recommended ETF. You can look up the symbols at your stockbroker.
You can see a listing of all the ETFs we recommend on this page.
Who is Rob Arnott?
Rob Arnott is the founds and chairman of Research Affiliates.
Research Affiliates is a giant in wealth management with $193 billion in assets under management.
Research Affiliates license their portfolio strategies to other wealth management firms.
An example of this is their proprietary RAFI index used by ETF provider Invesco for many of Invesco’s smart-beta ETFs.
The ETF PRF – Invesco FTSE RAFI US 1000 ETF should be well known to smart-beta investors.
Rob Arnott is their founder. He is the archetypical investment specialist with over 100 academic articles to his name.
He is the author of the book The Fundamental Index: A Better Way to Invest. In that book, he lays out the method for constructing the RAFI index. It is co-written with Jason Hus and John West who are both smart-beta masterminds.
The Fundamental Index: A Better Way to Invest
Description of the Rob Arnott portfolio
The Rob Arnott portfolio comes from an article from the now-defunct indexuniverse.com, where Robb Arnott analyzed hedge-fund performance against a model portfolio.
The article is now available at etf.com.
Meb Faber included the model portfolio in his fantastic book Global Asset Allocation: A Survey of the World’s Top Asset Allocation Strategies.
Global Asset Allocation: A Survey of the World’s Top Asset Allocation Strategies
The portfolio that Meb Faber presented in his book is slightly different from the one presented at indexuniverse.com.
Originally Robb Arnott proposed an equal weight of the following asset classes:
- Commodities
- REITs
- Emerging market bonds
- TIPS
- High-yield bonds
- Long-term U.S. government bonds
- Unhedged non-U.S. bonds
- International stocks
- U.S. stocks
- investment-grade bonds
Meb Faber’s version merged some of the bond asset classes, probably due to missing time-series data for the asset classes.
We present both versions here as we have time-series data for all asset classes. We believe it offers a smidgin of a higher fidelity to the original model portfolio.
Spoiler: The higher fidelity model has slightly higher returns. We call it the Rob Arnott ETF.com model portfolio.
If we consider Rob Arnott’s position on smart-beta he would most likely recommend a different portfolio.
A portfolio with the majority of asset classes dedicated to smart-beta index strategies.
The portfolios have a 60% allocated to bonds so we don’t expect to see record-breaking returns but we do expect to see a low drawdown.
Where can I learn more about Rob Arnott?
- Rob Arnott’s book The Fundamental Index: A Better Way to Invest is a good read. It was one of the first books I read which described smart-beta strategies.
- Meb Faber’s interview with Rob Arnott is here.
- Barry Ritholtz interview with Rob Arnott on his Master in Business series. You can find links here.
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.
Related questions
What was the best asset class in 2022?
The best asset class in 2022 was energy with a return of 64.17%.
Is Rob Arnott’s portfolio better than the Permanent portfolio?
Yes, Rob Arnott’s portfolios has had a slighty higher return than the Permanent portfolio since 1989.
