Charles Ellis Investment Portfolio, The Gentleman Giant

charles D Ellis investment portfolio

Charles Ellis Investment Portfolios can be built with just 2 ETFs. They are exposed to between 50% – 100% equities and to between 0% – 50% bonds. There are low-risk, medium risk, and high-risk portfolios available.

For the past 10 years, the Charles Ellis Portfolio 40-50 years old has returned 8.57% with a standard deviation of 16.08%. The dividend yield is 2.26%. The 30-year return is 7.55%. Year to date the Charles Ellis Portfolio 40-50 years old has returned 1.33%.

What is the return of Charles Ellis portfolios?

NameAsset class countYear to dateReturn in 201910 year returnCAGR since 1989 (%)Risk levelExpense ratio
Charles Ellis Portfolio Under 40 Years Old10.9426.799.04%7.5230.08%
Charles Ellis Portfolio 40 - 50 Years Old21.3324.998.57%7.5530.08%
Charles Ellis Portfolio 50 - 60 Years Old21.7123.188.09%7.5330.07%
Charles Ellis Portfolio 60 - 70 Years Old22.4819.567.07%7.3720.06%
Charles Ellis Portfolio 70 - 80 Years Old22.8717.756.55%7.2320.06%

How do you build Charles Ellis Portfolios with ETFs?

Here is the allocation for the Charles Ellis 40-50 years old portfolio.

Charles Ellis 40-50 years old portfolio

  • 90% Total World Stocks (VT)
  • 10% Total US Bond Markets (BND)

You can find the rest of Charles Ellis’ portfolios below

Who is Charles Ellis?

Charles Ellis is a giant in the investment community. He is the epitome of a gentleman.

Charles D. Ellis, born in 1937, has had a noteworthy career.

Highlights include:

  • He worked in the Rockefeller family investment office.
  • He worked in the investment bank of Donaldson, Lufkin & Jenrette.
  • Founded Greenwich Associates in 1972. It is an investment analytics company.
  • Taught investment management at Harvard Business School in 1970 and 1974
  • Charles Ellis taught investment management at the Yale School of Management in 1986.
  • He was a successor as trustee of Yale University’s endowment fund from 1997 to 2008, where he was working alongside David Swensen, who is also a legend.
  • Charles D. Ellis was the chair of the board of the Institute of Chartered Financial Analysts (CFA). CFA is the most prestigious investing designation you can get.
  • He was a director of the Vanguard Group from 2001 to 2009.
  • Charles Ellis is currently on the advisory boards of Wealthfront and Rebalance.

With over 50 years of investing experience, Charles D. Ellis knows how to invest.

The investment management business (it should be a profession but is not) is built upon a simple and basic belief: Professional money managers can beat the market. That premise appears to be false.

– Charles D. Ellis

charles-d-ellis
Charles D. Ellis

Charles D. Ellis as an author

Charles D. Ellis has written one of the most famous investment books of all time:

It is outstanding.

The last half of the book caters more to investment professionals as it goes deep into how to construct an investment policy and so on. The book is a continuation of his article “The Loser’s Game” which appeared in the Financial Analyst Journal.

His book Winning The Loser’s Game is part of the canon of investing literature, in my opinion.

How can institutional investors hope to outperform the market… when, in effect, they are the market?”
– Charles D. Ellis

Charles D. Ellis has written 16 books.

Together with co-investing giant Burton Malkiel, he authored another fantastic book which is called The Elements of Investing, Easy Lessons for Every Investor.

It is practical, relevant, and offers much concrete advice on how to navigate the investing landscape.

Charles D. Ellis is a pleasure to listen to as he is always extremely eloquent, highly intelligent, and, as Barry Ritholz said in an interview, “he is the perfect gentleman.”

Description of Charles D. Ellis’ investment portfolios

The investment portfolios of Charles D. Ellis comes from his book The Elements of Investing, Easy Lessons for Every Investor. In that book, both Burton Malkiel and Charles Ellis offer their recommendation on how to construct a portfolio.

The portfolios of Charles Ellis are no surprise when you are aware of his investing conviction. I know of only one other person with such a strong belief in simplifying your investment strategy, and that is John C. Bogle.

“successful firms do flourish by holding fast to fundamental values: sticking to the right path; taking the long-term view; and insisting always on quality and excellence.”

– Charles D. Ellis

Charles Ellis does not think you can beat the market. It is a loser’s game to think that you can. It is best to diversify as much as you can.

For this reason, his portfolios are constructed using only two asset classes:

  • Total World Market Stocks
  • Total US Bond Market

Charles Ellis’ portfolio recommendation is based on your age. The older you are, the more bonds you should have in your portfolio, according to Charles Ellis. This is the standard approach in investing and is mirrored by many others like John Bogle.

One more book I want to highlight

There is one more book that I want to highlight before we turn to the asset allocation. It is a relatively new book by Ellis: and it is called The Index Revolution and is from 2016. It is a fantastic summary of the thinking of Charles Ellis combined with investing wisdom. It is forwarded by his long time friend and collaborator Burton Malkiel.

Asset Allocation for Charles D. Ellis’ investment portfolios

Below you can find the asset alllocation for all of Charles Ellis’ portfolios and how to build them using ETFs.

Charles Ellis Portfolio under 40 years Old

  • 100% Total World Stocks (VT)

Charles Ellis Portfolio 40-50 years Old

  • 90% Total World Stocks (VT)
  • 10% Total US Bond Markets (BND)

Charles Ellis Portfolio 50-60 years Old

  • 80% Total World Stocks (VT)
  • 20% Total US Bond Markets (BND)

Charles Ellis Portfolio 60-70 years Old

  • 60% Total World Stocks (VT)
  • 40% Total US Bond Markets (BND)

Charles Ellis Portfolio 70-80 years Old

  • 50% Total World Stocks (VT)
  • 50% Total US Bond Markets (BND)

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.

Resources for the Charles D. Ellis’ investment portfolios

Go here for the first interview that Barry Ritholz did with Charles Ellis on his Master in Business podcast from Bloomberg.

Go here for the second interview that Barry Ritholz did with Charles Ellis on his Master in Business podcast from Bloomberg.

The best and most famous book by Charles Ellis is Winning the Loser’s Game, Seventh Edition: Timeless Strategies for Successful Investing, but he has written many more.

If you are looking for portfolios that are just as simple as Charles Ellis’ portfolios you should check out the balanced portfolios and the three-fund portfolios.

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

Related Questions

What is the best Total World Stock ETF?

The best world stock ETF is the Vanguard Total World Stock ETF (VT)

What is the best Total US Bond Market ETF?

The best Total US Bond Market ETF is the Vanguard Total US Bond Market ETF (BND).

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