Index Fund Advisors, Market Beating Portfolios

Index Fund Advisors achieve stellar returns with their very diversified portfolios. Are they gonna win for you too?

Index Fund Advisors portfolios can be built with 9-15 ETFs. They are exposed to between 0-90% bonds and 10-100% equities. There a low-risk, medium-risk, and high-risk portfolios.

For the past 10 years, the Index Fund Advisors, Portfolio 80 has returned 9.03% with a standard deviation of 14.19%. The dividend yield is 2.3%. The 30-year return is 9.46%. Year to date the Index Fund Advisors, Portfolio 80 has returned -6.74%.

How do you build Index Fund Advisors portfolios with ETFs?

Below is how to construct the Index Fund Advisors, Portfolio 80 with ETFs. You can find many more asset allocation further below.

  • 9.60%    US Large Cap Value (VTV)
  • 9.60%    US Large Cap (VV)
  • 16.00%  US Small Cap Value (VIOV)
  • 16.00%  US Small Cap (VIOO)
  • 2.00%    REITs (VNQ)
  • 3.20%    Emerging Markets (VWO)
  • 4.80%    International Large Cap Value (EFV)
  • 4.80%    International Small Cap Blend (VSS)
  • 5.00%    Short Term Treasuries (VGSH)
  • 4.80%    International Small Cap Value (DLS)
  • 4.00%    Emerging Markets Small Cap (EWX)
  • 3.20%    Emerging Markets Value (FNDE)
  • 5.00%    1 Year Fixed Income (BSV)
  • 5.00%    2 Year Global Fixed Income (BNDX)
  • 5.00%    5 Year Global Fixed Income (BND/BNDX)
  • 2.00%    International REITs (VNQI)

Who is Index Fund Advisors (IFA)?

Index Fund Advisors’ investment portfolios are genuinely excellent. They provide high returns, and they are smartly made with help from Dimensional Fund Advisors.

Index Fund Advisors is headed up by Mark T. Hebner. It is an investment advisory firm using exclusively Dimensional Advisor Funds (DFA) and employing passive index strategies to achieve some very respectable returns.

IFA provides a wealth of fantastic information on investing on their site. Mark Hebner’s book Index Funds: The 12-Step Recovery Program for Active Investors is a great way to get up to speed on why indexing and passive investing is an excellent way to invest. Just recently IFA had a Galton Board made to describe how random distribution occurs. It is a fun little gadget that shows that returns from asset classes are mostly random.

What is special about the Index Fund Advisors (IFA) Portfolios?

IFA’s portfolios are characterized by the tilt towards value and small-cap. The portfolios also diversify into many asset classes. It helps as their returns are excellent. The free lunch of diversifying is working great.

The Random Walker – a fun but educational toy!

The IFA portfolios use Dimensional Fund Advisors funds, but their portfolios can be perfectly replicated using Vanguard ETFs or iShares ETFs without suffering any performance hit.

It may still be worth it to invest with IFA as you get access to their skillful financial advice as well as behavioral guidance. They also do tax-loss harvesting within their accounts. So even though it may look like it is cheaper to do it yourself the outcome depends on your psychological profile and financial situation.

Performance of the Index Fund Advisors (IFA) Portfolios

NameAsset class countYear to dateReturn in 201910 year returnCAGR since 1989 (%)Risk levelExpense ratio
Index Fund Advisors, Portfolio 10012-9.2924.1310.75%10.5330.18%
Index Fund Advisors, Portfolio 8016-6.7420.499.03%9.4630.16%
Index Fund Advisors, Portfolio 6016-4.1916.857.25%8.2520.13%
Index Fund Advisors, Portfolio 5016-2.9115.046.34%7.620.12%
Index Fund Advisors, Portfolio 9016-7.1322.159.73%9.9430.17%
Index Fund Advisors, Portfolio 7016-4.6518.628.06%8.8320.15%
Index Fund Advisors, Portfolio 4016-0.9313.325.45%6.9210.11%
Index Fund Advisors, Portfolio 30160.311.554.55%6.2210.10%
Index Fund Advisors, Portfolio 20161.549.793.64%5.4910.08%
Index Fund Advisors, Portfolio 10162.788.022.71%4.7310.07%

The portfolios perform very well. The IFA portfolios are an excellent example of how to tilt your portfolio towards value and small-cap stocks.

Building the portfolio(s)

Below you can see the asset allocations for the portfolio(s). You can also see if the portfolio(s) has a socially responsible investing (ESG) variant portfolio. You can read more about socially responsible investing (ESG) investment portfolios in this post.
To build the portfolio(s) yourself, go to our best in class ETF page to see which ETF you should choose for a particular asset class. There you can also see which socially responsible investing ESG ETFs you should select.

Asset Allocation of Index Fund Advisors (IFA) Portfolios

index-fund-advisors-portfolio-60-Portfolio

Index Fund Advisors, Portfolio 10

  • 1.20%    US Large Cap Value (VTV)
  • 1.20%    US Large Cap (VV)
  • 2.00%    US Small Cap Value (VIOV)
  • 2.00%    US Small Cap (VIOO)
  • 0.25%    REITs (VNQ)
  • 0.40%    Emerging Markets (VWO)
  • 0.60%    International Large Cap Value (EFV)
  • 0.60%    International Small Cap Blend (VSS)
  • 23.00%  Short Term Treasuries (VGSH)
  • 0.60%    International Small Cap Value (DLS)
  • 0.50%    Emerging Markets Small Cap (EWX)
  • 0.40%    Emerging Markets Value (FNDE)
  • 22.50%  1 Year Fixed Income (BSV)
  • 22.50%  2 Year Global Fixed Income (BNDX)
  • 22.50%  5 Year Global Fixed Income (BND/BNDX)
  • 0.25%    International REITs (VNQI)

Index Fund Advisors, Portfolio 20

  • 2.40%    US Large Cap Value (VTV)
  • 2.40%    US Large Cap (VV)
  • 4.00%    US Small Cap Value (VIOV)
  • 4.00%    US Small Cap (VIOO)
  • 0.50%    REITs (VNQ)
  • 0.80%    Emerging Markets (VWO)
  • 1.20%    International Large Cap Value (EFV)
  • 1.20%    International Small Cap Blend (VSS)
  • 20.00%  Short Term Treasuries (VGSH)
  • 1.20%    International Small Cap Value (DLS)
  • 1.00%    Emerging Markets Small Cap (EWX)
  • 0.80%    Emerging Markets Value (FNDE)
  • 20.00%  1 Year Fixed Income (BSV)
  • 20.00%  2 Year Global Fixed Income (BNDX)
  • 20.00%  5 Year Global Fixed Income (BND/BNDX)
  • 0.50%    International REITs (VNQI)

 Index Fund Advisors, Portfolio 30

  • 3.60%    US Large Cap Value (VTV)
  • 3.60%    US Large Cap (VV)
  • 6.00%    US Small Cap Value (VIOV)
  • 6.00%    US Small Cap (VIOO)
  • 0.75%    REITs (VNQ)
  • 1.20%    Emerging Markets (VWO)
  • 1.80%    International Large Cap Value (EFV)
  • 1.80%    International Small Cap Blend (VSS)
  • 17.50%  Short Term Treasuries (VGSH)
  • 1.80%    International Small Cap Value (DLS)
  • 1.50%    Emerging Markets Small Cap (EWX)
  • 1.20%    Emerging Markets Value (FNDE)
  • 17.50%  1 Year Fixed Income (BSV)
  • 17.50%  2 Year Global Fixed Income (BNDX)
  • 17.50%  5 Year Global Fixed Income (BND/BNDX)
  • 0.75%    International REITs (VNQI)

Index Fund Advisors, Portfolio 40

  • 4.80%    US Large Cap Value (VTV)
  • 4.80%    US Large Cap (VV)
  • 8.00%    US Small Cap Value (VIOV)
  • 8.00%    US Small Cap (VIOO)
  • 1.00%     REITs (VNQ)
  • 1.60%     Emerging Markets (VWO)
  • 2.40%    International Large Cap Value (EFV)
  • 2.40%    International Small Cap Blend (VSS)
  • 15.00%  Short Term Treasuries (VGSH)
  • 2.40%    International Small Cap Value (DLS)
  • 2.00%    Emerging Markets Small Cap (EWX)
  • 1.60%    Emerging Markets Value (FNDE)
  • 15.00%  1 Year Fixed Income (BSV)
  • 15.00%  2 Year Global Fixed Income (BNDX)
  • 15.00%  5 Year Global Fixed Income (BND/BNDX)
  • 1.00%    International REITs (VNQI)

Index Fund Advisors, Portfolio 50

  • 6.00%    US Large Cap Value (VTV)
  • 6.00%    US Large Cap (VV)
  • 10.00%  US Small Cap Value (VIOV)
  • 10.00%  US Small Cap (VIOO)
  • 1.25%     REITs (VNQ)
  • 2.00%    Emerging Markets (VWO)
  • 3.00%    International Large Cap Value (EFV)
  • 3.00%    International Small Cap Blend (VSS)
  • 12.50%  Short Term Treasuries (VGSH)
  • 3.00%    International Small Cap Value (DLS)
  • 2.50%    Emerging Markets Small Cap (EWX)
  • 2.00%    Emerging Markets Value (FNDE)
  • 12.50%  1 Year Fixed Income (BSV)
  • 12.50%  2 Year Global Fixed Income (BNDX)
  • 12.50%  5 Year Global Fixed Income (BND/BNDX)
  • 1.25%    International REITs (VNQI)

Index Fund Advisors, Portfolio 60

  • 7.20%    US Large Cap Value (VTV)
  • 7.20%    US Large Cap (VV)
  • 12.00%  US Small Cap Value (VIOV)
  • 12.00%  US Small Cap (VIOO)
  • 1.50%     REITs (VNQ)
  • 2.40%    Emerging Markets (VWO)
  • 3.60%    International Large Cap Value (EFV)
  • 3.60%    International Small Cap Blend (VSS)
  • 10.00%  Short Term Treasuries (VGSH)
  • 3.60%    International Small Cap Value (DLS)
  • 3.00%    Emerging Markets Small Cap (EWX)
  • 2.40%    Emerging Markets Value (FNDE)
  • 10.00%  1 Year Fixed Income (BSV)
  • 10.00%  2 Year Global Fixed Income (BNDX)
  • 10.00%  5 Year Global Fixed Income (BND/BNDX)
  • 1.50%    International REITs (VNQI)

Index Fund Advisors, Portfolio 70

  • 8.40%    US Large Cap Value (VTV)
  • 8.40%    US Large Cap (VV)
  • 14.00%  US Small Cap Value (VIOV)
  • 14.00%  US Small Cap (VIOO)
  • 1.75%     REITs (VNQ)
  • 2.80%    Emerging Markets (VWO)
  • 4.20%    International Large Cap Value (EFV)
  • 4.20%    International Small Cap Blend (VSS)
  • 7.50%    Short Term Treasuries (VGSH)
  • 4.20%    International Small Cap Value (DLS)
  • 3.50%    Emerging Markets Small Cap (EWX)
  • 2.80%    Emerging Markets Value (FNDE)
  • 7.50%    1 Year Fixed Income (BSV)
  • 7.50%    2 Year Global Fixed Income (BNDX)
  • 7.50%    5 Year Global Fixed Income (BND/BNDX)
  • 1.75%    International REITs (VNQI)

Index Fund Advisors, Portfolio 80

  • 9.60%    US Large Cap Value (VTV)
  • 9.60%    US Large Cap (VV)
  • 16.00%  US Small Cap Value (VIOV)
  • 16.00%  US Small Cap (VIOO)
  • 2.00%    REITs (VNQ)
  • 3.20%    Emerging Markets (VWO)
  • 4.80%    International Large Cap Value (EFV)
  • 4.80%    International Small Cap Blend (VSS)
  • 5.00%    Short Term Treasuries (VGSH)
  • 4.80%    International Small Cap Value (DLS)
  • 4.00%    Emerging Markets Small Cap (EWX)
  • 3.20%    Emerging Markets Value (FNDE)
  • 5.00%    1 Year Fixed Income (BSV)
  • 5.00%    2 Year Global Fixed Income (BNDX)
  • 5.00%    5 Year Global Fixed Income (BND/BNDX)
  • 2.00%    International REITs (VNQI)

Index Fund Advisors, Portfolio 90

This portfolio is part of Portfolio Einstein Gold, Premium Portfolios. 

Index Fund Advisors, Portfolio 100

This portfolio is part of Portfolio Einstein Gold, Premium Portfolios. 

How we select the right ETFs

There are a lot of ETFs out there. Most of them can be discarded because:

  • They are too expensive
  • They hold too few assets and are therefore too illiquid
  • They do not meet the criteria for representing the asset class they are supposed to mirror.

We have carefully selected an ETF for each asset class that the portfolios on portfolioeinstein.com use. If you want to read more about our selection process and see what we consider the best ETFs please visit our article What Is The Best ETF?

If you are a European investor you need to buy European ETFs. We list 47 best ETFs in our article What Are The Best ETFs For European Investors? (Here Is 47).

As of 2020 we also track socially responsible investing ESG portfolios. Socially responsible investing (ESG) portfolios prioritize investing that puts an emphasis on environmental, social and corporate governance issues.

You can find the socially responsible investing ESG ETFs in the same article.

Alternatives to Index Fund Advisors (IFA) Portfolios

The three most similar groups of portfolios to the Index Fund Advisors (IFA) Portfolios. The first group of portfolios is David Booth’s portfolios. David Booth is the CEO of Dimensional Advisor Funds, so no surprise why the portfolios are similar. The second group is Dan Solin’s portfolios. Dan Solin used to work at IFA. The third group of portfolios is the FPL Capital Management Portfolios.

The IFA portfolios are very complex. They all have many assets classes

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 even provide higher returns in the long run.

You can find the rebalance worksheet in our article Here Is The Most Easy To Use Portfolio Rebalance Tool

Related questions

What is the best index fund to invest in 2020?

The best index fund to invest in 2020 is the Vanguard Total Stock Market ETF (VTI).

What is the 10 year average return on the S&P 500?

The average return of the S&P for the past 10 years has been 13.52%.

Can you lose all your money in an index fund?

No, that is extremely unlikely. If you hold a total stock market ETF then all the companies within that ETF need to go bankrupt for you to lose all your money. Vanguard’s Total Stock Market ETF (VTI) holds over 1000 different stocks.

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