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David Swensen Portfolio: Asset Allocation With A Punch

The David Swensen portfolio is a powerhouse and offers massive diversification with downside protection. What's not to like? Read on to find out.

This page details the portfolio of David Swensen. Here you will find asset allocation and performance metrics.

David Swensen Portfolio: Asset Allocation With A Punch

Who is David Swensen?

David Swensen is the renowned investment manager of Yale University’s Endowment Fund. He almost single-handedly pioneered the massive diversification in alternative assets for endowments and large institutions. He is the author of the fantastic book Unconventional Success. In that book, he outlines the portfolio below. The portfolio is known for its simplicity and for its strong diversification. It is also known to do well in most market climates. As a kicker, David Swensen has the average investor’s interest in mind. He is known for calling out unscrupulous investment fees and corrupt investment practices. He is a strong advocate of low-cost index funds.

David Swensen is a clear runner up for being one of the good guys in investing.

Asset Allocation for David Swensen’s Portfolio

david-swensen-unconvenstional-success-portfolio

Returns and risk for David Swensen’s portfolio

Portfolio nameAsset class count1 year return (2019)Year to date10 year returnCAGR since 1989DrawdownRisk LevelExpense ratioYield
David Swensen's Portfolio621.43%1.64%8.62%8.99%-25.96%3 - medium risk0.07%2.05%

 

Historical returns of the David Swensen portfolio. portfoliovisualizer.com

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. Low-cost index funds. Read here how we selected the best funds.

Asset allocation for David Swensen’s portfolio

  • 30.00%  US Total Stock Market   (VTI)
  • 20.00%  REITs     (VNQ)
  • 5.00%    Emerging Markets           (VWO)
  • 15.00%  International All-World ex-US     (VEU)
  • 15.00%  Intermediate-Term Treasuries       (VGIT)
  • 15.00%  TIPS       (VTIP)

Advantages and disadvantages of David Swensen’s Portfolio

Advantages:

  • A portfolio from one of the giants in the investment world.
  • Well diversified so it will perform well in most investing climates.
  • Conservative allocations so you may not suffer massive drawdowns.
  • Feel safe in that you are taking the advice of one of the good guys in investing.
  • Easy to implement and maintain with only 5 asset classes. You only need 5 ETFs.

Disadvantages:

  • May be too conservative with its emphasis on bond allocation.
  • May be too overweighted in al estate (REITs) for some people.
  • Investors may want a more fine-grained portfolio with more asset classes (a more sliced and diced portfolio)

Resources

Go here for a rebalance excel worksheet.

Get the fantastic book here:

Books here.

Summary and your next steps

David Swensen Portfolio is a well-diversified global portfolio recommend by one of the giants in the investment world.  It is easy to implement and you will sleep soundly at night knowing that one the truly good guys of investing has recommended you a great all-weather portfolio.

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