Build Burton Malkiel Portfolios With ETFs

What is Burton Malkiel’s 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.

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What is the historical return of Burton Malkiel’s portfolio?

Here is the historical return of Burton Malkiels’ 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
Burton Malkiel Portfolio, Mid-Twenties-21.3616.810.929.8414.95-34.90%0.07%2.21
Burton Malkiel Portfolio, Late Thirties to Early Forties-20.9816.6710.869.8714.39-33.61%0.07%2.19
Burton Malkiel Portfolio, Mid-Fifties-20.6716.4710.539.8213.26-31.08%0.08%2.18
Burton Malkiel Portfolio, Late Sixties and Beyond-19.0915.919.849.4911.37-26.51%0.08%2.12
Performance for Burton Malkiels’ 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 do Burton Malkiel’s portfolios compare to the best portfolios?

Below you can see the returns of the best portfolios we 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

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

This is for Burton Malkiel’s 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 Malkiel?

Burton Malkiel is a giant in the investing industry. He has worked 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 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 very diversified. Burton G. Malkiel has constructed some of the most known portfolios.

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 much more volatile than bonds, and dividend stocks are more closely correlated with stocks than bonds. That’s because they are stocks.

Burton Malkiel - A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing

Get the book on Amazon.

Asset allocation pie-chart for one of Burton Malkiel’s portfolios

Burton G. Malkiel Portfolio, Late Thirties to Early Forties

What is the asset allocation of Burton Malkiel’s portfolios?

Below you can see how you build Burton Malkiel’s portfolios with ETFs.

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

  • 32.50% US Total Stock Market (VTI)
  • 10% REITs (VNQ)
  • 16.25% International Developed Blend (VEA)
  • 16.25% Emerging Markets (VWO)
  • 5% Cash (money market fund) (BIL)
  • 5% Corporate Bonds (LQD)
  • 10% Dividend Growth (VIG)
  • 5% Emerging Market Bonds (VWOB)

Burton G. Malkiel Portfolio, Mid-Fifties

  • 27% US Total Stock Market (VTI)
  • 12.50% REITs (VNQ)
  • 14% International Developed Blend (VEA)
  • 14% Emerging Markets (VWO)
  • 5% Cash (money market fund) (BIL)
  • 7.50% Corporate Bonds (LQD)
  • 12.50% Dividend Growth (VIG)
  • 7.50% Emerging Market Bonds (VWOB)

Burton G. Malkiel Portfolio, Mid-Twenties

  • 35% US Total Stock Market (VTI)
  • 10% REITs (VNQ)
  • 17.50% International Developed Blend (VEA)
  • 17.50% Emerging Markets (VWO)
  • 5% Cash (money market fund) (BIL)
  • 4% Corporate Bonds (LQD)
  • 7% Dividend Growth (VIG)
  • 4% Emerging Market Bonds (VWOB)

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.

Where can I learn more about Burton G. Malkiel?

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.

The Elements of Investing, Easy Lessons for Every Investor

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.

 

Suggestions for your next steps

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You stand to gain thousands more dollars EACH YEAR for the price of a few months of Netflix.

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.