David Swensen Portfolio, Build Yale’s Portfolio With ETFs

Learn to build David Swensen's portfolio with just a few ETFs. See how it performs!
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In this article, you find out how to build the David Swensen portfolio with ETFs and find out how it has performed.

What is David Swensen’s Portfolio?

David Swensen’s portfolio is exposed to 70% stocks and 30% bonds. It is a high-risk portfolio and can be built with 6 ETFs.

For the past 10 years, it has returned 8.06 with a standard deviation of 11.16. The dividend yield is 1.93. The 30 year return is 9.01%

How do you build David Swensen’s portfolio with ETFs?

Here is how you build the David Swensen’s portfolio with ETFs:

  • 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)

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.

What is the historical return of David Swensen’s portfolio?

Below you can see the historical return of David Swensen’s portfolio.

Data was last updated on October 1, 2021 at 04:21 a.m. ET

NameAsset class countYear to dateReturn in 202010 year returnCAGR since 1989 (%)Risk levelExpense ratio
David Swensen Portfolio610.30%9.78.069.0120.07%

How does David Swensen’s portfolio compare to the best portfolios?

Below you can see the returns of the best portfolios that we have benchmarked.

NameSee PortfolioYear to dateReturn in 202010 year returnCAGR since 1989 (%)Draw Down
Premium Portfolio15.92%18.2913.8410.77-37.63%
Premium Portfolio8.30%18.118.6311.14-44.87%
Premium Portfolio13.48%19.712.8410.49-32.77%
Premium Portfolio20.78%3.198.5210.59-36.46%
Premium Portfolio20.17%3.668.6210.48-36.35%
Premium Portfolio15.18%21.0313.7810.83-37.00%
Premium Portfolio19.24%8.711.5610.65-35.26%
Premium Portfolio15.41%7.488.3910.64-37.91%
Premium Portfolio16.16%5.3610.8811.23-35.43%
Premium Portfolio20.81%3.4210.2110.47-40.85%

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 the book, he outlines the portfolio below. The portfolio is known for its simplicity and its strong diversification. It is also known to do well in most market climates.

David Swensen’s book belongs in the canon of investment literature. It is absolutely required reading if you want to learn about investing.

“When you look at the results on an after-fee, after-tax basis, over reasonably long periods of time, there’s almost no chance that you end up beating the index fund.”

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.

Let’s take a look at how David Swensen has constructed a high-performing portfolio that takes the best of this thinking from the Yale Endowment model.

What is David Swensen’s Yale Endowment Portfolio?

The portfolio is simple, and you can build it with only 6 ETFs. The portfolio contains all the important asset classes without any bad ones. We consider holding gold and commodities detrimental to getting good returns.

The portfolio holds 30% in bonds. Because of 30% bonds, it is a conservative portfolio, especially when interest rates are so low (2021).

There are quite a few other portfolios that may interest you. The most obvious choice would be one of Rick Ferri’s Core Four portfolios.

What is the asset Allocation for David Swensen’s Portfolio?

Here is the 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)
david-swensen-unconvenstional-success-portfolio

“Six asset classes provide exposure to well-defined investment attributes.”

What are the advantages and disadvantages of David Swensen’s Portfolio?

Advantages:

  • The David Swensen portfolio is a portfolio from one of the giants in the investment world.
  • The Swensen investment portfolio is diversified so that it will perform well in most investing climates.
  • The portfolio has conservative allocations, so you may not suffer massive drawdowns.
  • You can feel safe in that you are taking the advice of one of the good guys in investing.
  • The investment portfolio is easy to implement and maintain with only five asset classes. You only need 6 ETFs.

Disadvantages:

  • The portfolio may be too conservative with its 30% emphasis on bond allocation.
  • The David Swensen portfolio maybe too overweighted in real estate (REITs) for some people.
  • You may want a more fine-grained portfolio with more asset classes (a more sliced and diced portfolio)

Resources

You can find David Swensen’s book here. It is very recommended.

Get a one-hour free course on investing with David Swensen below.

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 may increase your returns.


If you want access to our high-performing portfolios then you need to take a look at the premium portfolios. This is a paid product that gives you the 59 best-performing portfolios since 1989. The portfolios represent a great opportunity for you to have a shot at increasing the returns of your portfolio.

Portfolioeinstein Premium Portfolios

Related questions

How has the Swensen portfolio performed compared against the S&P 500?
Since 1989 as of 2021 the S&P 500 has returned a compounded return of 10.77%. David Swensen’s portfolio has returned 9.01% in the same period.

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