Burton Malkiel Portfolio, No Random Returns Here

Burton G Malkiel Portfolio

The Burton Malkiel portfolios are exposed to between 50% and 90% stocks. They are exposed to a variety of bonds which include emerging market bonds. They can be built with 8 ETFs. The portfolios range from medium to high-risk portfolios.

For the past 10 years, the Burton G. Malkiel Portfolio, Late Sixties and Beyond has returned 8.68% with a standard deviation of 11.74%. The dividend yield is 2.19. The 30-year return is 9.27%. Year to date the Burton G. Malkiel Portfolio, Late Sixties and Beyond has returned 0.32. Last year it returned 21.78%

What is the return of Burton G. Malkiel’s portfolio

NameAsset class countYear to dateReturn in 201910 year returnCAGR since 1989 (%)Risk levelExpense ratio
Burton Malkiel Portfolio, Mid-Twenties80.2224.159.06%9.5330.08%
Burton Malkiel Portfolio, Late Thirties to Early Forties80.4123.969.09%9.5730.08%
Burton Malkiel Portfolio, Mid-Fifties80.3423.329.02%9.5530.09%
Burton Malkiel Portfolio, Late Sixties and Beyond80.3221.788.68%9.2720.10%

How do you build Burton G. Malkiel’s portfolio with ETFs?

This if for Burton G. Malkiel Portfolio, Late Sixties and Beyond.                           

  • 20.00%  US Total Stock Market   (VTI)
  • 15.00%  REITs     (VNQ)
  • 10.00%  International Developed Blend      (VEA)
  • 10.00%  Emerging Markets           (VWO)
  • 10.00%  Cash (money market fund)          (BIL)
  • 9.50%    Corporate Bonds              (LQD)
  • 16.00%  Dividend Growth              (VIG)
  • 9.50%    Emerging Market Bonds (EMB / VWOB)

Who is Burton G. Malkiel?

Burton Malkiel is a giant in the investing industry. He has served for 28 years at Vanguard. Vanguard is the powerhouse mutual fund provider. Vanguard is featured on this site with our articles John Bogle’s Portfolio The Vanguard of Legends, How’s His Portfolio? and Vanguard LifeStrategy Portfolios, Let’s Put Investing In A Box.

Burton G. Malkiel has been on the board of Council of Economic Advisers. He also served as dean of the Yale School of Management for many years. He is currently the chief investment officer (CIO) at robo advisor firm Wealthfront. We feature Wealthfron in our article Robo Advisor Wealthfront Portfolios, Do Robos Dream of Higher Returns?

Burton G. Malkiel’s wildly popular book, A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing, cemented the theory of the Efficient Market Hypothesis. In the book, he proposes several portfolios for different stages in life.

Here is Burton G. Malkiel on Consuelo Mack’s Wealthtrack.

What is unique about Burton G. Malkiel’s portfolios?

The Burton Malkiel portfolios are a thing of beauty. Burton G. Malkiel has constructed some of the most beautiful portfolios around. They are built on the formula seen so many times before. They are built around a three-step process. It looks like this:

  1. Start with a total US stock market fund
  2. Add international exposure
  3. Tilt your portfolio towards specific asset classes if desired.

There is one peculiar thing about Burton Malkiel’s portfolios. The strange thing is that he lumps dividend stocks in the same category as bonds. But the thing is, dividend stocks are way more volatile than bonds, and dividend stocks are more closely correlated with stocks than bonds. That’s because they are stocks.

a-random-walk-down-wall-street-the-time-tested-strategy-for-successful-investing-eleventh-edition
Get the book on Amazon.

Building the portfolio(s)

Below you can see the asset allocations for the portfolio(s). You can also see if the portfolio(s) has a socially responsible investing (ESG) variant portfolio. You can read more about socially responsible investing (ESG) investment portfolios in this post.
To build the portfolio(s) yourself, go to our best in class ETF page to see which ETF you should choose for a particular asset class. There you can also see which socially responsible investing ESG ETFs you should select.

Asset Allocation of Burton G. Malkiel’s portfolios

burton-malkiel-portfolio-asset-allocation

Burton G. Malkiel Portfolio, Late Sixties and Beyond                           

  • 20.00%  US Total Stock Market   (VTI)
  • 15.00%  REITs     (VNQ)
  • 10.00%  International Developed Blend      (VEA)
  • 10.00%  Emerging Markets           (VWO)
  • 10.00%  Cash (money market fund)          (BIL)
  • 9.50%    Corporate Bonds              (LQD)
  • 16.00%  Dividend Growth              (VIG)
  • 9.50%    Emerging Market Bonds (EMB / VWOB)

Burton G. Malkiel Portfolio, Late Thirties to Early Forties                  

This portfolio is part of Portfolio Einstein Gold, Premium Portfolios. 

Burton G. Malkiel Portfolio, Mid-Fifties                     

This portfolio is part of Portfolio Einstein Gold, Premium Portfolios. 

Burton G. Malkiel Portfolio, Mid-Twenties               

This portfolio is part of Portfolio Einstein Gold, Premium Portfolios. 

How we select the right ETFs

There are a lot of ETFs out there. Most of them can be discarded because:

  • They are too expensive
  • They hold too few assets and are therefore too illiquid
  • They do not meet the criteria for representing the asset class they are supposed to mirror.

We have carefully selected an ETF for each asset class that the portfolios on portfolioeinstein.com use. If you want to read more about our selection process and see what we consider the best ETFs please visit our article What Is The Best ETF?

If you are a European investor you need to buy European ETFs. We list 47 best ETFs in our article What Are The Best ETFs For European Investors? (Here Is 47).

As of 2020 we also track socially responsible investing ESG portfolios. Socially responsible investing (ESG) portfolios prioritize investing that puts an emphasis on environmental, social and corporate governance issues.

You can find the socially responsible investing ESG ETFs in the same article.

Alternatives to Burton G. Malkiel’s portfolios

Burton Malkiel has a great portfolio. He has taken a proven basic formula and extended it a little bit. Other portfolios do the same, but if you want the basic formula, the 3-fund portfolio is the hallmark of this formula. You should also look at Rick Ferri’s 4-fund portfolios.

Resources for Burton G. Malkiel’s portfolios

Burton G. Malkiel has written an excellent book with another investing legend, Charles D. Ellis. It is a concise and actionable book on investing. It is called The Elements of Investing, Easy Lessons for Every Investor.

elements of investing burton malkiel and charles ellis

Get a short primer on investing with the below video where Burton G. Malkiel talks at Google. It is part of Google’s attempt at educating its employees on financial matters. JL Collins also did a talk at Google. You can find that link in our article on JL Collins Portfolios, Learn Money In 1 minute 36 secs.

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 even provide higher returns in the long run.

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

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