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Larry Swedroe Portfolio: Nemesis of Low Returns

This article displays Larry Swedroe portfolios. They are low volatility and high returning portfolios. In other words: They are awesome.

This article displays the Larry Swedroe portfolios. They are low volatility and high returning portfolios. In other words: They are awesome.

Larry Swedroe Portfolio: Nemesis of Low Returns

Who is Larry Swedroe?

Larry Swedroe is a prolific author and director of research at the wealth management firm Buckingham Strategic Wealth. He often visits the Bogleheads Forum where he shares insights, knowledge and answers questions. He is easily one of our favorite authors on investing. He is also a clear runner up for one of the good guys in investing.

He has written many articles all over the web as well. Examples include articles on ETF.com, Forbes, finance.yahoo.com and of course on the Bam Alliance website. The BAM Alliance is a “community of independent advisors” that put the client first, i.e. they hold their fiduciary responsibility to a very high standard.

Larry Swedroe favors a data-driven approach to investing. This means that in all his books he has plenty of evidence why he suggests a certain portfolio. In that regard, he is very much like Paul Merriman who is also an evidence-based investor.

Larry Swedroe is a prolific writer. The really good books include The Only Guide to a Winning Investment Strategy You’ll Ever Need (co-written),  and Your Complete Guide to Factor-Based Investing: The Way Smart Money Invests Today. You may not think that you need to do any factor-based investing (smart beta) but the first 30 pages in this book are like a 500$ course on investing! It teaches you everything about what asset classes are and how to think about them. It teaches you what “the market” really is. And it teaches you that not all asset classes are really asset classes!

complete-guide-to-factor-investing
Awesome introduction to asset classes, “the market” and why small-caps have outperformed.

What is special about the Larry Swedroe portfolios?

Larry Swedroe has designed some very interesting portfolios that look like no-one else’s. The one theme that runs through all of his portfolios is to keep the portfolios low on volatility. Larry Swedroe favors safety over high-risk returns. This doesn’t mean that Larry Swedroe’s portfolios are lackluster! On the contrary.

Larry Swedrowe’s portfolios are designed in such a way that their first component is to be heavy (or very heavy) on low volatility asset classes like bonds. The second component of Larry Swedroe’s portfolios is to add high performing, high-risk asset classes like small caps to make the portfolio offer great returns.

The results of this portfolio jiu-jitsu are portfolios that have very low volatility and high returns in comparison to other portfolios with the same amount of bond allocation.

This makes the portfolios suited for normal savings situations or for clients that simply cannot stomach the high volatility of a 100% stock portfolio.

If you want to get inside of Larry Swedroe’s head to see how he thinks I recommend his book The Only Guide to a Winning Investment Strategy You’ll Ever Need.

the-only-guide-to-a-winning-investment-strategy-youll-ever-need

The results of this portfolio jiu-jitsu are portfolios that have very low volatility and high returns

Performance of the Larry Swedroe portfolios

Portfolio nameAsset class count1 year return (2019)Year to date10 year returnCAGR since 1989DrawdownRisk LevelExpense ratioYield
Larry Swedroe Simple Portfolio617.00%-0.54%7.57%8.64%-23.80%3 - medium risk0.12%1.55%
Larry Swedroe, The Larry Portfolio 1712.89%0.64%5.76%7.36%-7.67%1 - very low risk0.10%2.06%
Larry Swedroe, The Larry Portfolio 2310.32%0.46%5.22%7.27%-2.92%1 - very low risk0.13%1.76%
Larry Swedroe, Eliminate Fat Tails Portfolio (value tilt)410.75%-0.21%4.05%6.97%-13.55%2 - low risk0.10%1.17%
Larry Swedroe Big Rocks Portfolio1116.34%0.17%6.94%7.92%-20.56%2 - low risk0.11%2.11%
Larry Swedroe Model Portfolios Conservative1012.05%0.24%5.02%6.76%-11.68%n/a0.08%1.90%
Larry Swedroe Model Portfolios Moderate1016.32%0.20%6.87%7.85%-20.82%n/a0.09%2.11%
Larry Swedroe Model Portfolios Moderately Aggressive1020.59%0.17%8.68%8.80%-29.96%n/a0.11%2.32%
Larry Swedroe Model Portfolios Highly Aggressive924.86%0.13%10.43%9.61%-39.10%n/a0.12%2.52%

Asset Allocation of the Larry Swedroe portfolios

larry-swedroe-portfolio-asset-allocation

Larry Swedroe Simple Portfolio               

  • 15.00%  US Large Cap Value         (VTV)
  • 15.00%  US Small Cap Value         (VIOV)
  • 13.00%  US Small Cap      (VIOO)
  • 4.00%    Emerging Markets           (VWO)
  • 13.00%  International Large Cap Value     (EFV)
  • 40.00%  TIPS       (VTIP)

Larry Swedroe, “The Larry” Portfolio 1                  

  • 5.00%    US Large Cap Value         (VTV)
  • 5.00%    US Large Cap      (VV)
  • 5.00%    US Small Cap Value         (VIOV)
  • 5.00%    US Small Cap      (VIOO)
  • 10.00%  International Large Cap Value     (EFV)
  • 10.00%  International Small Cap Blend             (VSS)
  • 60.00%  Intermediate-Term Treasuries       (VGIT)

Larry Swedroe, “The Larry” Portfolio 2                  

  • 12.50%  US Small Cap Value         (VIOV)
  • 75.00%  Intermediate-Term Treasuries       (VGIT)
  • 12.50%  International Small Cap Value             (DLS)

Larry Swedroe, Eliminate Fat Tails Portfolio                  

  • 15.00%  US Small Cap      (VIOO)
  • 15.00%  Emerging Markets           (VWO)
  • 35.00%  Cash (money market fund)          (BIL)
  • 35.00%  TIPS       (VTIP)

Larry Swedroe’s Big Rocks Portfolio                       

  • 9.00%    US Large Cap Value         (VTV)
  • 9.00%    US Large Cap      (VV)
  • 9.00%    US Small Cap Value         (VIOV)
  • 9.00%    US Small Cap      (VIOO)
  • 6.00%    REITs     (VNQ)
  • 3.00%    Emerging Markets           (VWO)
  • 3.00%    International All-World ex-US     (VEU)
  • 6.00%    International Large Cap Value     (EFV)
  • 3.00%    International Small Cap Blend             (VSS)
  • 40.00%  Short Term Treasuries       (VGSH)
  • 3.00%    International Small Cap Value             (DLS)

Find the best ETFs and mutual funds in our updated article What Is The Best ETF And Mutual Fund?

Larry Swedroe resources

Larry Swedroe is a prolific writer – here is an overview of all of his books an Amazon.

You can find his articles on ETF.com where he is a frequent contributor.

Larry Swedroe is the director of research at Buckingham Wealth Advisors.

Larry Swedroe is also found on the Bogleheads forum where he helps out answering questions and cutting through the F.U.D.

Let’s continue the conversation!

Which portfolio do you use?

After having read up on Larry Swedroe’s portfolios I encourage you to find other great portfolios right here on portfolioeinstein.com.

If you have suggestions for new portfolios be sure to add them in comments or reach out to me.

I would love to hear from you!

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