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Craig Israelsen’s 7Twelve Portfolio: Too Much Diversification?

This is the article detailing the investment portfolios of Craig L. Israelsen. Here you will find asset allocation as well as performance for the portfolios Craig L. Israelsen has constructed.

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 in order 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.

Craig Israelsen’s 7Twelve Portfolio: Too Much Diversification?

Asset Allocation


Returns and risk for The 7Twelve Portfolio

Portfolio nameAsset class count1 year return (2019)Year to date10 year returnCAGR since 1989DrawdownRisk LevelExpense ratioYield
7Twelve Portfolio1218.56%0.18%6.15%7.95%-23.15%3 - medium risk0.16%1.66%
7-Twelve Portfolio Age Based 50-60 by Craig Israelsen1215.27%0.17%5.06%7.03%-18.09%2 - low risk0.16%1.60%
7-Twelve Portfolio Age Based 60-70 by Craig Israelsen1211.99%0.17%3.96%6.07%-13.04%2 - low risk0.15%1.55%
7-Twelve Portfolio Age Based 70 Plus by Craig Israelsen128.71%0.17%2.83%5.07%-8.00%1 - very low risk0.15%1.49%


Graph from

Building the portfolio

Below you can see which mutual funds or ETFs you can use to build the portfolio. They are the best-in-class funds and ETFs for this purpose. They are low-cost index funds that best capture the asset class. Read here how we selected the best funds.

Asset allocation for 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%    Int. 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%    Int. 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)

Advantages and disadvantages of  the 7Twelve Portfolio


  • Great diversification, practically all known asset classes are included
  • Constructed by one of the foremost experts in the retirement field.
  • You get great diversification across many asset classes.
  • One of the few portfolios that specifically has mid-cap stocks.
  • Good opportunities for rebalancing, thereby reducing risk and increasing returns.
  • Easy to understand 12 funds, equal-weighted.


  • May be too heavy into natural resources and commodities (16%).
  • It may not be worth the trouble with so many funds to juggle around.
  • It could be overly expensive in commissions to rebalance because of the 12 funds.
  • One of the few portfolios that specifically has mid-cap stocks.
  • May not perform as well as a simple 3-fund portfolio.


Go here for a rebalance excel worksheet.

Book here.


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

Summary and your next steps

Craig Israelsen’s 7Twelve is a welcome addition to a diversified portfolio.  The 7Twelve portfolio divides your portfolio into 12 funds equally. Craig Israelsen is an expert in financial planning and with his portfolio, you can rest assured that it has been thoroughly tested.

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