Buildd Allan Roth Second Grader Portfolios With ETFs

Learn to build the Second Grader portfolios with a few ETFs. See how they compare against other portfolios.
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What is the Allan Roth Second Grader Portfolio?

Allan Roth Second Grader Portfolios can be built with 3-5 ETFs. They are exposed to between 30% and 100% equities. They are low-risk, medium-risk, and high-risk portfolios.

For the past 10 years, the Allan Roth Second Grader High-Risk Portfolio has returned 10.29 with a standard deviation of 15.18. The dividend yield is 1.95. The 30-year return is 8.91%. Year to date the Allan Roth Second Grader High-Risk Portfolio has returned 10.78%%.

How do you build Allan Roth Second Grader Portfolios with ETFs? 

Here is the asset allocation and ETFs you need to build the high-risk Second Grader portfolio

  • 60.00%  US Total Stock Market (VTI)
  • 30.00%  International All-World ex-US (VEU)
  • 10.00%  Total US Bond Market (BND)

We cover all of Allan Roth’s portfolios further below.

What is the historical return of the Second Grader Portfolios?

Below you can see the historical return of the Second Grader portfolios

NameAsset class countYear to dateReturn in 202010 year returnCAGR since 1989 (%)Risk levelExpense ratio
Allan Roth Second Grader High Risk Portfolio310.78%16.7310.298.9130.05%
Allan Roth Second Grader Medium Risk Portfolio36.58%13.728.258.2520.04%
Allan Roth Second Grader Low Portfolio32.37%10.726.097.2910.04%
Allan Roth Second Grader Five-Fund High Risk Portfolio510.64%15.739.879.0430.07%
Allan Roth Second Grader Five-Fund Medium Risk Portfolio46.86%12.698.078.2520.05%
Allan Roth Second Grader Five-Fund Low Risk Portfolio42.51%10.25.997.2810.04%
Allan Roth Second Grader High Risk with CDs Portfolio310.96%15.999.978.5930.06%
Allan Roth Second Grader Medium Risk with CDs Portfolio37.28%10.86.956.9620.08%
Allan Roth Second Grader Low Risk with CDs Portfolio33.61%5.63.815.0410.11%

How do the Second Grader portfolio compare to the best portfolios?

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

NameSee PortfolioYear to dateReturn in 202010 year returnCAGR since 1989 (%)Draw Down
Premium Portfolio15.92%18.2913.8410.77-37.63%
Premium Portfolio8.30%18.118.6311.14-44.87%
Premium Portfolio13.48%19.712.8410.49-32.77%
Premium Portfolio20.78%3.198.5210.59-36.46%
Premium Portfolio20.17%3.668.6210.48-36.35%
Premium Portfolio15.18%21.0313.7810.83-37.00%
Premium Portfolio19.24%8.711.5610.65-35.26%
Premium Portfolio15.41%7.488.3910.64-37.91%
Premium Portfolio16.16%5.3610.8811.23-35.43%
Premium Portfolio20.81%3.4210.2110.47-40.85%

Who is Allan Roth, and who is the second-grader?

Allan Roth is the founder of  Wealthlogic and author of the excellent book How a Second Grader Beats Wall Street: Golden Rules Any Investor Can Learn.

Allan Roth has written How a Second Grader Beats Wall Street: Golden Rules Any Investor Can Learn. He has served as CFO and is offering financial solutions through his firm Wealthlogic. His portfolio, the second-grader portfolio, is regarded as a lazy portfolio.

We consider him as one of the good guys in investing due to his insistence of low fees, fiduciary responsibility, and being adamant about keeping investing simple.

Here’s who the second-grader is.

The story goes (in the book) that Allan Roth taught his son how to invest in the stock market. Allan Roth began teaching his son when his son was in second grade. His son has subsequently beaten Wall Street by holding this portfolio!

Dare to be Dull

– Allan Roth

In the book, Allan Roth describes the journey and reasoning for selecting the portfolio. The book is a masterpiece because it builds an ever-expanding foundation from which you can lay your knowledge on investing. It’s like he makes a ladder for you. With each step, you get a little smarter on how to invest and what the stock market is.

The video below is Allan Roth discussing the secrets of investing (which isn’t so secret)

What is unique about the Second Grader Portfolio?

Allan Roth’s Second Grader Portfolio is a close relative to the three-fund portfolio.

The Second-Grader portfolios are built by holding three core asset classes:

  • US Total Stock Market (VTI)
  • International All-World ex-US (VEU)
  • Total US Bond Market (BND)

Some of Allan Roth’s portfolios use more asset classes to diversify more.

If you want an even simpler portfolio, you should check out the balanced portfolios. These portfolios are built using only two asset classes.

Now you might think that easy and simple will make you have lower returns. Not so in investing. Easy and simple is often better in investing.

Asset Allocation of Second Grader Portfolios

Below you can find out how you build all of the Second-Grader portfolios with ETFs.

Allan Roth Second Grader Five-Fund High-Risk Portfolio

  • 54.00%  US Total Stock Market   (VTI)
  • 6.00%    REITs     (VNQ)
  • 27.00%  International All-World ex-US     (VEU)
  • 10.00%  Total US Bond Market    (BND)
  • 3.00%    Precious Metals (GLTR)

Allan Roth Second Grader Five-Fund Low-Risk Portfolio

  • 18.00%  US Total Stock Market   (VTI)
  • 2.00%    REITs     (VNQ)
  • 10.00%  International All-World ex-US     (VEU)
  • 70.00%  Total US Bond Market    (BND)

Allan Roth Second Grader Five-Fund Medium Risk Portfolio

  • 36.00%  US Total Stock Market (VTI)
  • 4.00%    REITs (VNQ)
  • 20.00%  International All-World ex-US (VEU)
  • 40.00%  Total US Bond Market (BND)

Allan Roth Second Grader High-Risk Portfolio

  • 60.00%  US Total Stock Market (VTI)
  • 30.00%  International All-World ex-US (VEU)
  • 10.00%  Total US Bond Market (BND)

Allan Roth Second Grader High Risk with CDs Portfolio

  • 60.00%  US Total Stock Market (VTI)
  • 30.00%  International All-World ex-US (VEU)
  • 10.00%  Cash (money market fund) (BIL)

Allan Roth Second Grader Low Portfolio

  • 20.00%  US Total Stock Market (VTI)
  • 10.00%  International All-World ex-US (VEU)
  • 70.00%  Total US Bond Market (BND)

Allan Roth Second Grader Low Risk with CDs Portfolio

  • 20.00%  US Total Stock Market (VTI)
  • 10.00%  International All-World ex-US (VEU)
  • 70.00%  Cash (money market fund) (BIL)

Allan Roth Second Grader Medium Risk Portfolio

  • 40.00%  US Total Stock Market (VTI)
  • 20.00%  International All-World ex-US (VEU)
  • 40.00%  Total US Bond Market (BND)

Allan Roth Second Grader Medium Risk with CDs Portfolio

  • 40.00%  US Total Stock Market (VTI)
  • 20.00%  International All-World ex-US (VEU)
  • 40.00%  Cash (money market fund) (BIL)

Note: CDs stands for Certificate of Deposit. It’s a low yield savings vehicle like a money market fund.

Alternatives to Second Grader Portfolios

There are many alternatives to the Second Grader Portfolio. The most prominent is the three-fund portfolio – also a Lazy Portfolios. All of Vanguard’s target-date retirement funds use 3-4 funds (they also have an international bond fund). I also consider Rick Ferri’s portfolios to be in the same league as Allan Roth’s Second Grader Portfolio.

Suggestions for your next steps

Finding the correct portfolio is hard. Maintaining your portfolio is also daunting. If you are still in doubt about which portfolio to choose, we suggest you read our article How To Invest Money: 5 Simple Steps That Work For Anyone

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 may increase your returns.


If you want access to our high-performing portfolios then you need to take a look at the premium portfolios. This is a paid product that gives you the 59 best-performing portfolios since 1989. The portfolios represent a great opportunity for you to have a shot at increasing the returns of your portfolio.

Portfolioeinstein Premium Portfolios
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