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Burton Malkiel Portfolio: No Random Returns Here

This page details the portfolios of Burton Malkiel. Burton Malkiel is the CIO of Wealthfront. Here you will find asset allocation and performance of Burton Malkiel's portfolios shown in A Random Walk Down Wall Street.

This page details the portfolios of Burton Malkiel. Burton Malkiel is the CIO of Wealthfront. Here you will find asset allocation and performance for all of Burton Malkiel’s portfolios described in A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing.

Burton Malkiel Portfolio: No Random Returns Here

Who is Burton Malkiel?

Burton Malkiel is a giant in the investing industry. He has served for 28 years at the Vanguard. He has been on the board of Council of Economic Advisers. He also served as dean of the Yale School of Management. He is currently the CIO at robo advisor firm Wealthfront. His 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.

What is special about Burton Malkiel’s portfolios?

The Burton Malkiel portfolios are a thing of beauty. Burton Malkiel has constructed some of the most beautiful portfolios around. They are built on the formula seen so many times before:

  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 peculiar thing is that he lumps dividend stocks in the same category as bonds. In his book, he lumps them together with bonds. Dividend stocks are way more volatile than bonds and are more closely correlated with stocks than bonds.

a-random-walk-down-wall-street-the-time-tested-strategy-for-successful-investing-eleventh-edition
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Performance of Burton Malkiel’s portfolios

Portfolio nameAsset class count1 year return (2019)Year to date10 year returnCAGR since 1989DrawdownRisk LevelExpense ratioYield
Burton Malkiel Portfolio, Mid-Twenties824.15%1.49%9.06%9.53%-34.90%5 - very high risk0.08%2.50%
Burton Malkiel Portfolio, Late Thirties to Early Forties823.96%1.57%9.09%9.57%-33.61%4 - high risk0.08%2.50%
Burton Malkiel Portfolio, Mid-Fifties823.32%1.68%9.02%9.55%-31.08%4 - high risk0.10%2.56%
Burton Malkiel Portfolio, Late Sixties and Beyond821.78%1.80%8.68%9.27%-26.51%4 - high risk0.11%2.55%

Asset Allocation of Burton Malkiel’s portfolios

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Burton 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 Malkiel Portfolio, Late Thirties to Early Forties                  

  • 32.50%  US Total Stock Market   (VTI)
  • 10.00%  REITs     (VNQ)
  • 16.25%  International Developed Blend      (VEA)
  • 16.25%  Emerging Markets           (VWO)
  • 5.00%    Cash (money market fund)          (BIL)
  • 5.00%    Corporate Bonds              (LQD)
  • 10.00%  Dividend Growth              (VIG)
  • 5.00%    Emerging Market Bonds (EMB / VWOB)

Burton Malkiel Portfolio, Mid-Fifties                     

  • 27.00%  US Total Stock Market   (VTI)
  • 12.50%  REITs     (VNQ)
  • 14.00%  International Developed Blend      (VEA)
  • 14.00%  Emerging Markets           (VWO)
  • 5.00%    Cash (money market fund)          (BIL)
  • 7.50%    Corporate Bonds              (LQD)
  • 12.50%  Dividend Growth              (VIG)
  • 7.50%    Emerging Market Bonds (EMB / VWOB)

Burton Malkiel Portfolio, Mid-Twenties               

  • 35.00%  US Total Stock Market   (VTI)
  • 10.00%  REITs     (VNQ)
  • 17.50%  International Developed Blend      (VEA)
  • 17.50%  Emerging Markets           (VWO)
  • 5.00%    Cash (money market fund)          (BIL)
  • 4.00%    Corporate Bonds              (LQD)
  • 7.00%    Dividend Growth              (VIG)
  • 4.00%    Emerging Market Bonds (EMB / VWOB)

Alternatives to Burton 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.

Conclusion

Which portfolio do you use?

After having read up on the Burton Malkiel’s portfolios I encourage you to find other great portfolios right here on portfolioeinstein.com.

If you have suggestions for new portfolios be sure to add them in comments or reach out to me.

I would love to hear from you!

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