Welcome to the Bethe Portfolio. Named for the physicist, Hans Bethe, this new portfolio will be like no other tracked here at ITA. 1) I am not managing this portfolio. 2) I will only be tracking the results, assuming I have access to all transactions. 3) The Bethe portfolio is professionally managed. 4) Reports will come quarterly rather than monthly.
The Strategic Asset Allocation (SAA) plan is to invest 70% in stocks and 30% in bonds. The owner of this portfolio does not need income so the portfolio is established with a higher risk than otherwise advised based on the age of the owner. The stock/bond ratio is the only variable under the control of the owner. After that decision is made, the money managers take over.
Here is the current breakdown of the portfolio that was launched last week.
- Total U.S. Equities – VTI (13%)
- Large-Cap Value – VTV (13%)
- Mid-Cap Value – VOE (4.2%)
- Small-Cap Value – VBR (3.7%)
- Developed International Equities – VEA (29.9%)
- Emerging Market Equities – VWO (6.2%)
- Municipal Bonds – MUB (17.2%)
- U.S. Corporate Bonds – LQD (1.7%)
- International Bonds – BNDX (6.9%)
- Emerging Market Bonds – VWOB (4.2%)
Most of these ETFs are familiar to ITA readers. If you are an advocate of passive portfolio management, this SAA is a reasonable plan to follow. If the percentage (70%) allocated to stocks is to high, then reduce percentages to VTI, VTV, VEA, etc. and increase the bond percentage.
I will know more about providing updates once the first report is available in January. I’ve been told that quarterly reports will be forthcoming rather than monthly updates. Since I do not have details as to how many shares were purchased for each ETF, I will wait until early January before I begin tracking the portfolio using the TLH Spreadsheet, our portfolio tracking Excel™ program.