We covered a few model portfolios in Model Portfolio Introduction, generally variations on Harry Browne’s Permanent Portfolio. For additional background and portfolios see Model Portfolios Background. These are especially adapted for exchange traded funds (ETFs). From 35,000 feet, we’re beginning by replacing the bond portion of the traditional 60:40 stock:bond portfolio with half bonds and half gold. As shown in The Impermanent Portfolio, it takes three independent degrees of freedom to build a robust portfolio. This provides an additional diversification as well as inflation protection.
20:20:60 Portfolio
This is a simple three fund portfolio suited to smaller accounts and minimal maintenance. Weightings of the funds are given in percent.
IAU 20%
GOVT 20%
VT 60%
20:20:30:30 Portfolio
This is a more sophisticated portfolio adapted for larger accounts and for those seeking a flatter and more diversified equity allocation than offered by straight market cap weighting. As of 2025, market cap indices have come to be dominated by a small number of supercap stocks. This portfolio maintains broad global coverage while weighing stocks on the basis of quality, dividends and value as well as market cap. It also offers broader commodity exposure. Conceptually it is 3:1 equites to commodities and 3:1 equities to treasuries. Weightings of the funds are given in permyriad.
CPER 100‱
IAU 1600‱
SLV 150‱
PLTM 150‱
GOVT 1800‱
COMT 200‱
DGRO 300‱
SCHD 300‱
VYM 600‱
VFQY 120‱
VFVA 180‱
IGRO 300‱
SCHY 300‱
VYMI 600‱
VWO 60‱
VSS 240‱
VT 2700‱
REET 300‱
The first four funds total 20%, and represent copper, gold, silver and platinum, traditional money.
The next two funds total 20% and cover treasuries and commodities, a sort of home grown answer to TIPS, bonds with an inflation filip.
The next ten funds total 30%, with the first five covering US stocks and the second five covering XS stocks – the rest of the world. These funds are a carefully selected mix covering the global equity market but weighted more by dividends, quality and value than market cap. VSS and VWO get their own allocations because XS small caps and emerging markets respectively are excluded in IGRO, SCHY, VYMI and capped in SCHY.
The final two funds total 30%, and are global stock funds covering the world stock market by market cap and real estate investment trusts, which get their own allocation here because they excluded by some of the funds in the previous group.
For commodities, there are a number of fine alternative funds available that can be used while maintaining the integrity and balance of the whole. For example for gold, IAU can be substituted with PHYS, for broad commodities, COMT can be substituted with COMB, CMDY, SDCI, PIT, DBC, etc.
A more compact version:
CPER 100‱
IAU 1600‱
SLV 150‱
PLTM 150‱
GOVT 1800‱
COMT 200‱
VYM 1125‱
VFMF 375‱
VYMI 1125‱
VSS 375‱
VT 2750‱
REET 250‱
I use this version because I tweak allocations frequently and it requires fewer linked trades. It cuts the number of stock funds from twelve to six. VYM&VYMI are the broadest of the dividend-oriented ETFs. These conservative dividend funds are complemented by the aggressive small-cap oriented VFMF and VSS, which further flatten the combination’s cap weighting. VSS covers the world outside the US (XS) small cap market that is excluded by most XS funds (including VYM&VYMI). VFMF combines the quality and value factors of VFQY&VFVA with volatility and momentum (which we don’t care about here but nevertheless haven’t been hurting the fund’s performance). It is, like VYM, actually an all-cap fund but is rich enough in small caps to complement it perfectly, behaving much like a Russell 2000 fund with a generous alpha. REET covers REITs, excluded by VYM&VYMI. VT is the foundation stock fund, the single fund that best represents stocks as an asset class, including virtually every tradeable stock in the world.
The combined result is a comprehensive stock allocation that moderates the top-heavy coverage of pure cap weighting with attention to investment merit. Along with the allocations to commodities and treasuries, the portfolio covers virtually every liquid asset of interest to investors.
20:20:20:20:20 Portfolio
Here we divide the whole into five equal parts; Commodities, with an emphasis on monetary metals, Treasuries, US stocks, XS stocks, and global stocks. This portfolio differs from the previous mostly in its greater emphasis on the equity flattening funds.
CPER 100‱
IAU 1600‱
SLV 100‱
PLTM 100‱
COMT 100‱
GOVT 2000‱
DGRO 200‱
SCHD 400‱
VYM 800‱
VFQY 160‱
VFVA 240‱
REET 200‱
IGRO 200‱
SCHY 400‱
VYMI 800‱
VWO 80‱
VSS 320‱
REET 200‱
VT 2000‱
This too has a more compact version:
CPER 100‱
IAU 1600‱
SLV 100‱
PLTM 100‱
COMT 100‱
GOVT 2000‱
VYM 1350‱
VFMF 450‱
VYMI 1350‱
VSS 450‱
REET 400‱
VT 2000‱