This is the article displaying the portfolios by wealth management firm FPL Capital Management. Here you will find a description, resources and performance for the portfolios as well as detailed information on how to implement them yourself.
FPL Capital Management portfolios
Contents
- 1 FPL Capital Management portfolios
- 2 Description of the FPL Capital Management portfolios
- 3 Performance of the FPL Capital Management portfolios
- 4 Asset allocation of the FPL Capital Management portfolios
- 4.1 FPL Capital Management Portfolio 10
- 4.2 FPL Capital Management Portfolio 20
- 4.3 FPL Capital Management Portfolio 30
- 4.4 FPL Capital Management Portfolio 40
- 4.5 FPL Capital Management Portfolio 50
- 4.6 FPL Capital Management Portfolio 60
- 4.7 FPL Capital Management Portfolio 70
- 4.8 FPL Capital Management Portfolio 80
- 4.9 FPL Capital Management Portfolio 90
- 4.10 FPL Capital Management Portfolio 100
- 5 Conclusion
I came across FPL Capital Management a while back and was impressed by the portfolios employed.
I was not impressed by their business practices. Let me dive a little into that.
It seemed that FPL Capital Management had bought the two domains bogleheads.com and bogleheads.net to drive traffic to their site. They did this by pointing the two domains to their site. They did this intentionally with deceptive motives. A pro-bono lawyer from the bogleheads.org sued for ownership of the two domains and they now point to bogleheads.org.
This was a smart move initially in the short-term by FPL Capital Management as bogleheads.org gets a lot of traffic (about 1 mil a day). It was, however, a very dumb move long-term as poor business practices will always remain on record and will stain your reputation – forever.
You can find the controversy here.
“It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”
– Warren Buffett
Bogleheads.org is a well-established investment community built around the philosophy of the late hero of investing John Bogle. John Bogle reigns supreme in the investing world as the #1 Good Guy In Investing.
Warning: The above story should make you pause from considering FPL as your wealth management partner even though their portfolios perform well. As Buffett said during the crisis of 2008:
“There’s never just one cockroach in the kitchen.”
– Warren Buffett on Wells Fargo
Description of the FPL Capital Management portfolios
FPL Capital Management has a lot of portfolios. It can be very confusing when looking at them.
Add to that that they last year changed the 10 portfolios that I display here on portfolioeinstin.com. The change was done both concerning asset allocation and the funds that make up the asset allocation. They have shifted more towards factor-based funds instead of pure index funds. That makes them a little harder to benchmark against but not impossible.
As a consequence, the portfolios presented here represent the portfolios that were on their site two years ago.
The portfolios are generally tilted towards value-based investing with a hint of small caps thrown in. As value stocks historically have performed better than growth stocks this makes them ideal candidates for outperformance.
Let’s see how they fare.
Performance of the FPL Capital Management portfolios
| Portfolio name | Asset class count | 1 year return (2019) | Year to date | 10 year return | CAGR since 1989 | Drawdown | Risk Level | Expense ratio | Yield |
|---|---|---|---|---|---|---|---|---|---|
| FPL Capital Management Portfolio 10 | 9 | 10.27% | 1.23% | 4.49% | 6.61% | -2.08% | 1 - very low risk | 0.05% | 2.23% |
| FPL Capital Management Portfolio 20 | 9 | 11.84% | 1.04% | 5.29% | 7.17% | -3.76% | 1 - very low risk | 0.07% | 2.28% |
| FPL Capital Management Portfolio 30 | 9 | 13.40% | 0.85% | 6.08% | 7.71% | -8.21% | 1 - very low risk | 0.09% | 2.35% |
| FPL Capital Management Portfolio 40 | 9 | 14.96% | 0.67% | 6.86% | 8.22% | -12.67% | 2 - low risk | 0.10% | 2.43% |
| FPL Capital Management Portfolio 50 | 9 | 16.52% | 0.48% | 7.62% | 8.70% | -17.12% | 2 - low risk | 0.12% | 2.50% |
| FPL Capital Management Portfolio 60 | 9 | 18.08% | 0.30% | 8.37% | 9.15% | -21.58% | 3 - medium risk | 0.13% | 2.58% |
| FPL Capital Management Portfolio 70 | 9 | 19.64% | 0.11% | 9.10% | 9.57% | -26.03% | 3 - medium risk | 0.15% | 2.65% |
| FPL Capital Management Portfolio 80 | 9 | 21.20% | -0.07% | 9.83% | 9.96% | -30.48% | 4 - high risk | 0.16% | 2.73% |
| FPL Capital Management Portfolio 90 | 9 | 22.76% | -0.26% | 10.54% | 10.31% | -34.94% | 5 - very high risk | 0.18% | 2.80% |
| FPL Capital Management Portfolio 100 | 8 | 24.32% | -0.44% | 11.24% | 10.63% | -39.39% | 5 - very high risk | 0.19% | 2.88% |
That is a beautiful representation of how stocks and bonds interact. The table shows how adding more stocks to a portfolio adds more risk but also adds higher returns.
The all-equity portfolio even manages to outperform the S&P 500 – very impressive!
The portfolios are similar to Index Fund Advisors: Market-Beating Portfolios and David Booth Portfolios: Home Runs For Days though slightly less complex.
Asset allocation of the FPL Capital Management portfolios
FPL Capital Management Portfolio 10
- 2.00% US Large Cap Value (VTV)
- 2.00% US Large Cap (VV)
- 2.00% US Small Cap Value (VIOV)
- 0.50% REITs (Real Estate) (VNQ)
- 1.00% International Lg Cap Value (EFV)
- 90.00% Total US Bond Market (BND)
- 0.50% Intl Sm Cap Value (DLS)
- 1.00% Emerging Markets Value (FNDE)
- 1.00% International REITs (Real Estate) (VNQI)
FPL Capital Management Portfolio 20
- 4.00% US Large Cap Value (VTV)
- 4.00% US Large Cap (VV)
- 4.00% US Small Cap Value (VIOV)
- 1.00% REITs (Real Estate) (VNQ)
- 2.00% International Lg Cap Value (EFV)
- 80.00% Total US Bond Market (BND)
- 2.00% Intl Sm Cap Value (DLS)
- 2.00% Emerging Markets Value (FNDE)
- 1.00% International REITs (Real Estate) (VNQI)
FPL Capital Management Portfolio 30
- 6.00% US Large Cap Value (VTV)
- 6.00% US Large Cap (VV)
- 6.00% US Small Cap Value (VIOV)
- 1.50% REITs (Real Estate) (VNQ)
- 3.00% International Lg Cap Value (EFV)
- 70.00% Total US Bond Market (BND)
- 3.00% Intl Sm Cap Value (DLS)
- 3.00% Emerging Markets Value (FNDE)
- 1.50% International REITs (Real Estate) (VNQI)
FPL Capital Management Portfolio 40
- 8.00% US Large Cap Value (VTV)
- 8.00% US Large Cap (VV)
- 8.00% US Small Cap Value (VIOV)
- 2.00% REITs (Real Estate) (VNQ)
- 4.00% International Lg Cap Value (EFV)
- 60.00% Total US Bond Market (BND)
- 4.00% Intl Sm Cap Value (DLS)
- 4.00% Emerging Markets Value (FNDE)
- 2.00% International REITs (Real Estate) (VNQI)
FPL Capital Management Portfolio 50
- 10.00% US Large Cap Value (VTV)
- 10.00% US Large Cap (VV)
- 10.00% US Small Cap Value (VIOV)
- 2.50% REITs (Real Estate) (VNQ)
- 5.00% International Lg Cap Value (EFV)
- 50.00% Total US Bond Market (BND)
- 5.00% Intl Sm Cap Value (DLS)
- 5.00% Emerging Markets Value (FNDE)
- 2.50% International REITs (Real Estate) (VNQI)
FPL Capital Management Portfolio 60
- 12.00% US Large Cap Value (VTV)
- 12.00% US Large Cap (VV)
- 12.00% US Small Cap Value (VIOV)
- 3.00% REITs (Real Estate) (VNQ)
- 6.00% International Lg Cap Value (EFV)
- 40.00% Total US Bond Market (BND)
- 6.00% Intl Sm Cap Value (DLS)
- 6.00% Emerging Markets Value (FNDE)
- 3.00% International REITs (Real Estate) (VNQI)
FPL Capital Management Portfolio 70
- 14.00% US Large Cap Value (VTV)
- 14.00% US Large Cap (VV)
- 14.00% US Small Cap Value (VIOV)
- 3.50% REITs (Real Estate) (VNQ)
- 7.00% International Lg Cap Value (EFV)
- 30.00% Total US Bond Market (BND)
- 7.00% Intl Sm Cap Value (DLS)
- 7.00% Emerging Markets Value (FNDE)
- 3.50% International REITs (Real Estate) (VNQI)
FPL Capital Management Portfolio 80
- 16.00% US Large Cap Value (VTV)
- 16.00% US Large Cap (VV)
- 16.00% US Small Cap Value (VIOV)
- 4.00% REITs (Real Estate) (VNQ)
- 8.00% International Lg Cap Value (EFV)
- 20.00% Total US Bond Market (BND)
- 8.00% Intl Sm Cap Value (DLS)
- 8.00% Emerging Markets Value (FNDE)
- 4.00% International REITs (Real Estate) (VNQI)
FPL Capital Management Portfolio 90
- 18.00% US Large Cap Value (VTV)
- 18.00% US Large Cap (VV)
- 18.00% US Small Cap Value (VIOV)
- 4.50% REITs (Real Estate) (VNQ)
- 9.00% International Lg Cap Value (EFV)
- 10.00% Total US Bond Market (BND)
- 9.00% Intl Sm Cap Value (DLS)
- 9.00% Emerging Markets Value (FNDE)
- 4.50% International REITs (Real Estate) (VNQI)
FPL Capital Management Portfolio 100
- 20.00% US Large Cap Value (VTV)
- 20.00% US Large Cap (VV)
- 20.00% US Small Cap Value (VIOV)
- 5.00% REITs (Real Estate) (VNQ)
- 10.00% International Lg Cap Value (EFV)
- 10.00% Intl Sm Cap Value (DLS)
- 10.00% Emerging Markets Value (FNDE)
- 5.00% International REITs (Real Estate) (VNQI)
Check out the best mutual funds and ETFs here.
Conclusion
FPL Capital Management Portfolios are very high returning portfolios due to tilt towards value. They do suffer the misfortune of being placed in the company of a wealth management firm with sketchy business practices. They should know better.
Would you invest with FPL Capital Management?
Would you use their portfolios?