Build Craig Israelsen’s 7Twelve Portfolio With ETFs

Learn to build the 7Twelve portfolio with ETFs. How does it compare to All-Weather?
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What is Craig Israelsen’s 7Twelve Portfolio?

Craig Israelsen’s 7Twelve Portfolio is exposed to 40% stocks 25% bonds and 35% alternatives including gold and REITs. It can be built with 12 ETFs. It is a medium-risk portfolio.

For the past 10 years, the 7Twelve Portfolio has returned 6.92 with a standard deviation of 10.03. The dividend yield is 1.64%. The 30-year return is 8.15%. Year to date the 7Twelve Portfolio has returned -6.62%.

What is the historical return of The 7Twelve Portfolio?

Below you can see the historical returns for the 7Twelve portfolio

Data was last updated on July 31, 2022 at 08:29 a.m. ET


NameAsset class countYear to dateReturn in 202010 year returnCAGR since 1989 (%)Risk levelExpense ratio
7Twelve Portfolio12-6.628.216.928.1520.15%
7-Twelve Portfolio Age Based 50-60 by Craig Israelsen12-5.286.645.687.1520.15%
7-Twelve Portfolio Age Based 60-70 by Craig Israelsen12-3.955.084.426.1210.15%
7-Twelve Portfolio Age Based 70 Plus by Craig Israelsen12-2.633.533.155.0410.15%

How do you build the 7Twelve portfolio with ETFs?

Here is how you build the 7Twelve portfolios with ETFs.

  • 8.37%    US Large Cap (VV)
  • 8.33%    US Mid Cap (IJH)
  • 8.33%    US Small Cap (VIOO)
  • 8.33%    REITs (VNQ)
  • 8.33%    International Developed Blend (VEA)
  • 8.33%    Emerging Markets (VWO)
  • 8.33%    Total US Bond Market (BND)
  • 8.33%    Cash (money market fund) (BIL)
  • 8.33%    Commodities (DBC / GSG)
  • 8.33%    Gold (IAU)
  • 8.33%    TIPS (VTIP)
  • 8.33%    Non-US Bonds (BNDX)

You can find the rest of the 7Twelve portfolios below.

The letters in brackets denote the stock symbol for the recommended ETF. You can look up the symbols at your stockbroker. You can see a listing of all the ETFs we recommend on this page.

Who is Craig Israelsen?

Craig L. Israelsen, Ph.D., is an Executive-in-Residence in the Financial Planning Program at Utah Valley University. He developed the 7-Twelve portfolio to create a portfolio with massive diversification. In his book 7Twelve: A Diversified Investment Portfolio with a Plan, he lays out the portfolio. The portfolio consists of 7 asset classes and 12 funds (or ETFs) that invest in those asset classes.

Description of Craig Israelsen’s 7Twelve Portfolio

Although we tongue-in-cheek allude to the fact that the 7Twelve portfolios are over diversified we very much welcome diversification. William Bernstein has long since demonstrated that a well-diversified portfolio lowers your risk and may lead to higher returns.

You really can’t have too much diversification. Consider the Total Stock Market ETF from Vanguard (VTI). It holds some 3000 companies. Now that’s diversification.

The problem with too much diversification is that you diversify into the wrong asset classes. The wrong asset classes are asset classes that depend more on speculation for their value to rise than human ingenuity and competition. Examples of these include investing in precious metals, wine, and most commodities.

7twelve portfolio asset allocation

Commodities have no intrinsic value and do not generate a steady stream of income like a real business.

The 7Twelve holds 8.33% in gold. It is a small allocation, but it could instead be directed towards a more productive asset class. The counter-argument to this is that it is productive because it provides diversification in downtimes.

The real strength of the 7Twelve investment portfolio is that it has a low drawdown, while still providing decent returns.

Asset allocation for The 7Twelve Portfolios


Below is a good commentary on the performance of the 7Twelve portfolio

Asset allocation for the 7Twelve portfolios

The 7Twelve portfolio

  • 8.37%    US Large Cap (VV)
  • 8.33%    US Mid Cap (IJH)
  • 8.33%    US Small Cap (VIOO)
  • 8.33%    REITs (VNQ)
  • 8.33%    International Developed Blend (VEA)
  • 8.33%    Emerging Markets (VWO)
  • 8.33%    Total US Bond Market (BND)
  • 8.33%    Cash (money market fund) (BIL)
  • 8.33%    Commodities (DBC / GSG)
  • 8.33%    Gold (IAU)
  • 8.33%    TIPS (VTIP)
  • 8.33%    Non-US Bonds (BNDX)

7-Twelve Portfolio Age-Based 50-60 by Craig Israelsen  

  • 6.63%    US Large Cap (VV)
  • 6.67%    US Mid Cap (IJH)
  • 6.67%    US Small Cap (VIOO)
  • 6.67%    REIT (VNQ)
  • 6.67%    International Developed Blend (VEA)
  • 6.67%    Emerging Markets (VWO)
  • 6.67%    Total US Bond Market (BND)
  • 26.67%  Cash (money market fund) (BIL)
  • 6.67%    Commodities (DBC / GSG)
  • 6.67%    Gold (IAU)
  • 6.67%    TIPS (VTIP)
  • 6.67%    Non-US Bonds (BNDX)

7-Twelve Portfolio Age-Based 60-70 by Craig Israelsen  

  • 5.00%    US Large Cap (VV)
  • 5.00%    US Mid Cap (IJH)
  • 5.00%    US Small Cap (VIOO)
  • 5.00%    REIT (VNQ)
  • 5.00%    International Developed Blend (VEA)
  • 5.00%    Emerging Markets (VWO)
  • 5.00%    Total US Bond Market (BND)
  • 45.00%  Cash (money market fund) (BIL)
  • 5.00%    Commodities (DBC / GSG)
  • 5.00%    Gold (IAU)
  • 5.00%    TIPS (VTIP)
  • 5.00%    Non-US Bonds (BNDX)

7-Twelve Portfolio Age-Based 70 Plus by Craig Israelsen

  • 3.37%    US Large Cap      (VV)
  • 3.33%    US Mid Cap         (IJH)
  • 3.33%    US Small Cap      (VIOO)
  • 3.33%    REIT       (VNQ)
  • 3.33%    Int. Developed Blend      (VEA)
  • 3.33%    Emerging Markets           (VWO)
  • 3.33%    Total US Bond Market    (BND)
  • 63.33%  Cash (money market fund)          (BIL)
  • 3.33%    Commodities     (DBC / GSG)
  • 3.33%    Gold      (IAU)
  • 3.33%    TIPS       (VTIP)
  • 3.33%    Non-US Bonds   (BNDX)

What are the advantages and disadvantages of  the 7Twelve Portfolio?


  • The 7Twelve portfolios have great diversification, almost all known asset classes are included.
  • The 7Twelve investment portfolios have been constructed by one of the foremost experts in the retirement field.
  • You get significant diversification across many asset classes with the 7Twelve portfolios.
  • The 7Twelve investment portfolios are some of the few portfolios that have mid-cap stocks. The mid-cap stocks have outperformed large-cap stocks historically.
  • With the 7Twelve portfolios, you get excellent opportunities for rebalancing, thereby reducing risk and may have a shot at increasing returns.
  • The portfolios are easy to understand. There are 12 funds, and they are equal-weighted.


  • The portfolios may tilt too much towards natural resources and commodities (16%).
  • The portfolios may be too complicated with 12 asset classes.
  • The portfolios can be overly expensive in commissions to rebalance because of the 12 funds. Commodity ETFs are also more expensive than stock and bond ETFs.
  • A bet on mid-cap stocks may not be what you want.
  • The portfolio may not perform as well as a simple 3-fund portfolio.

Resources for the 7Twelve portfolios

Go here for the 7Twelve site. It’s excellent with many tables and articles by Craig Israelsen.

Craig Israelsen regularly publishes content on the 7Twelve strategy. You can find his library here.

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 can increase your returns.

If you want access to our high-performing portfolios then you want to take a look at the premium portfolios. This is a paid product that gives you the 20 best-performing portfolios since 1989. The portfolios represent a great opportunity for you to get more money from your investment portfolios. We think it’s a “no-brainer”.

You stand to gain literally thousands more dollars EACH YEAR for the price of a few months of Netflix. (Haven’t you watched enough Netflix?).

Related questions

What is the All-Weather portfolio?
The All-Weather portfolio is built by Ray Dalio and Tony Robbins. It has 30% stocks, 55% bonds, and 15% alternatives.

What is a lazy portfolio?
A lazy portfolio is a portfolio that requires little maintenance and is easy to build. The Couch Potato portfolio is an example of a lazy portfolio.

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