Build Rob Arnott’s portfolio With ETFs
Learn how to build Rob Arnott's portfolio with ETFs. How do they compare against other portfolios?
What is Rob Arnott’s portfolio?
Rob Arnotts Portfolio is exposed to 30% stocks, 60% bonds, and 10% commodities. It can be built with just 8 ETFs. Rob Arnott’s portfolio is a low-risk portfolio.
For the past 10 years Rob Arnotts Portfolio returned 5.94 with a standard deviation of 7.15. The dividend yield is 1.8. The 30-year return is 7.5%. Year to date Rob Arnotts Portfolio has returned -8.26%. Last year it returned 7.12%.
Article Contents
- What is the historical return of Rob Arnott’s portfolio?
- How does the Rob Arnott’s portfolio compare to the best portfolios?
- How do you build Rob Arnott’s portfolio with ETFs?
- Make sure you select the right ETFs!
- Who is Rob Arnott?
- Description of the Rob Arnott portfolio
- Resources for the Rob Arnott portfolio
- Suggestions for your next steps
What is the historical return of Rob Arnott’s portfolio?
Here is the historical return of Rob Arnott’s portfolio.
Data was last updated on July 31, 2022 at 08:29 a.m. ET
| Name | Asset class count | Year to date | Return in 2020 | 10 year return | CAGR since 1989 (%) | Risk level | Expense ratio |
|---|---|---|---|---|---|---|---|
| Rob Arnott Portfolio | 8 | -8.26 | 7.12 | 5.94 | 7.5 | 1 | 0.17% |
| Rob Arnott ETF.com model portfolio | 7 | -8.58 | 6.11 | 6.07 | 7.75 | 1 | 0.21% |
How does the Rob Arnott’s portfolio compare to the best portfolios?
Below you can see the returns of the best portfolios that we have benchmarked.
| Name | See Portfolio | Year to date | Return in 2020 | 10 year return | CAGR since 1989 (%) | Draw Down |
|---|---|---|---|---|---|---|
| Premium Portfolio |  | -13.23 | 18.29 | 16.52 | 11.28 | -37.63% |
| Premium Portfolio | | -15.52 | 18.11 | 11.03 | 11.21 | -44.87% |
| Premium Portfolio | | -14.05 | 19.7 | 14.99 | 10.85 | -32.77% |
| Premium Portfolio | | -10.09 | 3.19 | 11.85 | 10.99 | -36.46% |
| Premium Portfolio | | -10.26 | 3.66 | 11.87 | 10.88 | -36.35% |
| Premium Portfolio | | -14.58 | 21.03 | 16.29 | 11.25 | -37.00% |
| Premium Portfolio | | -9.31 | 8.7 | 14.47 | 11.14 | -35.26% |
| Premium Portfolio | | -13.7 | 7.48 | 11.45 | 10.93 | -37.91% |
| Premium Portfolio | | -12.75 | 5.36 | 13.2 | 11.81 | -35.43% |
| Premium Portfolio | | -10.64 | 3.42 | 13.15 | 10.99 | -40.85% |
How do you build Rob Arnott’s portfolio with ETFs?
Here is how you build Rob Arnott’s portfolio with ETFs
- 10% Large Cap Blend (VOO)
- 10% Total International Stocks (VEA)
- 10% REITs (VNQ)
- 10% Commodities (DBC)
- 10% Long Term Treasuries (TLT)
- 20% Intermediate Corporate Bonds (LQD)
- 10% TIPS (VTIP)
- 20% International Bonds (BNDX)
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.
Make sure you select the right ETFs!
There are a lot of ETFs! It is pretty boring to sift through hundreds and hundreds of ETFs just to find the right one, but it is worth it!
Finding the right and BEST ETF could earn you a lot more money than number two on the list.
We have done the work for you – all for FREE.
We have carefully selected ETFs 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 (they need to be of the UCITS kind!).
We have listed 47 of the best ETFs in our article What Are The Best ETFs For European Investors? (Here Is 47).
As of 2021 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.
Who is Rob Arnott?
Rob Arnott is the founds and chairman of Research Affiliates.
Research Affiliates is a giant in wealth management with $193 billion in assets under management.
Research Affiliates license their portfolio strategies to other wealth management firms. An example of this is their RAFI index used by ETF provider Invesco for many of Invesco’s smart-beta ETFs.The ETF PRF – Invesco FTSE RAFI US 1000 ETF should be well known to smart-beta investors.
Rob Arnott is their founder. He is the archetypical investment specialist with over 100 academic articles to his name. He is also the author of the book The Fundamental Index: A Better Way to Invest. In that, he lays out the method for constructing the above-mentioned RAFI index. It is co-written with Jason Hus and John West who are both smart-beta masterminds.
Description of the Rob Arnott portfolio
The Rob Arnott portfolio comes from an article from the now-defunct indexuniverse.com, where Robb Arnott analyzed hedge-fund performance against a model portfolio.
The article is now available at etf.com.
Meb Faber included the model portfolio in his fantastic book Global Asset Allocation: A Survey of the World’s Top Asset Allocation Strategies. The portfolio that Meb Faber presented in his book is slightly different from the one presented at indexuniverse.com. Originally Robb Arnott proposed an equal weight of the following asset classes:
- Commodities
- REITs
- Emerging market bonds
- TIPS
- High-yield bonds
- Long-term U.S. government bonds
- Unhedged non-U.S. bonds
- International stocks
- U.S. stocks
- investment-grade bonds
Meb Faber’s version merged some of the bond asset classes, probably due to missing time-series data for the asset classes.
We present both versions here as we have time-series data for all asset classes. We believe it offers a smidgin of a higher fidelity to the original model portfolio. Spoiler: The higher fidelity model has slightly higher returns. We call it the Rob Arnott ETF.com model portfolio.
If we consider Rob Arnott’s position on smart-beta he would most likely recommend a different portfolio. A portfolio with the majority of asset classes dedicated to smart-beta index strategies. The portfolios have a 50% allocated to bonds so we don’t expect to see record-breaking returns but we do expect to see a low drawdown.
Resources for the Rob Arnott portfolio
- As mentioned, his book The Fundamental Index: A Better Way to Invest is very worthwhile. It was one of the first books I read detailing smart-beta strategies.
- Meb Faber’s interview with Rob Arnott is here.
- Barry Ritholtz interview with Rob Arnott on his Master in Business series. You can find links here.
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 can increase your returns.
If you want access to our high-performing portfolios then you want to take a look at the premium portfolios. This is a paid product that gives you the 20 best-performing portfolios since 1989. The portfolios represent a great opportunity for you to get more money from your investment portfolios. We think it’s a “no-brainer”.
You stand to gain literally thousands more dollars EACH YEAR for the price of a few months of Netflix. (Haven’t you watched enough Netflix?).
