The Permanent Portfolio: How to Build It With ETFs

What is the Permanent Portfolio – and Where Did it Come From?

The Permanent Portfolio is Harry Browne’s four-asset portfolio: 25% stocks, 25% long-term Treasuries, 25% gold and 25% cash, rebalanced to those weights as prices drift. Each quarter is assigned to one economic condition: stocks for prosperity, gold for inflation, long-term Treasuries for deflation and cash for recession. Because no one can reliably predict which condition comes next, Browne held all four in equal parts, so at least one sleeve is always working.

The Allocation

Browne’s design is four equal sleeves, each with one job:

• Stocks, 25%: covers prosperity
• Gold, 25%: covers inflation
• Long-term Treasuries, 25%: covers deflation
• Cash, 25%: covers recession

The Harry Browne inspired recipe implements this with four ETFs:

• IWF to represent equities. This ETF tracks the Russell 1000 Growth Index.
• GLD to represent gold.
• TLT to represent government bonds. This ETF tracks a U.S. Treasury 20+ Year Bond Index.
• SHY to represent cash. This ETF tracks a U.S. Treasury 1-3 Year Bond Index.

One sample Harry Browne inspired recipe portfolio is Permanent Plus (s.plus), which omits the cash sleeve and holds three ETFs in equal thirds:

• GLD: 33.33%
• IWF: 33.33%
• TLT: 33.34%

ETF choices for each sleeve

There is no single best Permanent Portfolio ETF, because the portfolio is four holdings, not one. Each sleeve has several close substitutes, and the right pick depends on cost, tax treatment and how closely the fund tracks its asset. Expense ratios below were checked in November 2026 and should be confirmed on the issuer’s page before buying.

Stocks

• Cost: the major U.S. stock ETFs from Vanguard and iShares charge about 0.03%. SPY costs about 0.09% but has the deepest trading and options market, which matters mainly to active traders.
• Tax: broad stock ETFs are usually the most tax-efficient sleeve, with qualified dividends and low turnover.
• Tracking: VTI holds the whole U.S. market, while VOO and IVV hold the S&P 500. The difference is mid and small cap stocks, and the two usually behave very similarly over long periods.

Long-term Treasuries

• Cost: VGLT, SPTL and SCHQ charge 0.03%. TLT charges 0.15% but is the largest and most heavily traded.
• Tracking: TLT holds Treasuries with 20 or more years remaining, while VGLT, SPTL and SCHQ hold those with 10 or more. TLT therefore has longer duration and moves more in both directions when rates change, so these funds are close substitutes, not identical ones. Extended-duration funds such as EDV and ZROZ move even more and change the character of the sleeve.
• Tax: distributions are ordinary income at the federal level. Treasury interest is generally exempt from state income tax, though how much of a fund’s distribution qualifies depends on the state.

Gold

• Cost: fees range from 0.09% for IAUM to 0.40% for GLD for the same asset. On a gold sleeve of 25,000 dollars, a quarter of a 100,000 dollar portfolio, the gap between GLD and GLDM is about 75 dollars a year.
• Tracking: these funds hold physical gold bullion and follow the gold price, so tracking differences are small and mostly come down to the fee. GLD is the largest and has the most liquid options market. Share prices differ because each share represents a different amount of gold, not because one fund is cheaper than another.
• Tax: gains on physically backed gold ETFs are generally taxed as collectibles, at up to 28% federal on long-term gains versus a 20% top rate for stocks. That makes account placement, such as holding gold in an IRA, worth considering.

Cash

• Cost: SGOV charges 0.09%, BIL 0.14% and SHV 0.15%.
• Tracking: SGOV holds Treasury bills maturing within three months, BIL one to three months and SHV up to one year. Longer maturities mean slightly more price movement when short rates change. A Treasury money market fund or self-purchased T-bills are also reasonable substitutes.
• Tax: interest is ordinary income at the federal level and generally exempt from state income tax, the same pattern as the Treasury sleeve.

20-year results

The table compares the Harry Browne inspired recipe Permanent Plus with PRPFX, a 60/40 portfolio and SPY.

Period: October 31, 2026

ETF version vs PRPFX

PRPFX is the best-known fund built on Browne’s idea, but it is a different portfolio from the ETF version.

What that did to returns:

• Cost: at 0.79%, PRPFX charges roughly 0.6 to 0.7 percentage points a year more than a four-ETF build, a gap that compounds over 20 years.
• Interest rates: PRPFX makes no commitment to long maturities in its dollar assets, while the ETF version holds long-term Treasuries by design, which means the two can react differently when rates rise.
• Different ingredients: PRPFX adds silver, Swiss franc assets and resource and growth stocks, and holds 20% in gold instead of 25%.

When it struggles

The Permanent Portfolio gives up some growth in exchange for protection, and three conditions expose that trade.

• Rising interest rates: long-term Treasuries are the most rate-sensitive sleeve. When rates rise quickly, as in 2022, long Treasuries and stocks can fall together, which removes the cushion the portfolio normally relies on. The Permanent Portfolio During Rising Interest Rates: Here's What Happens
• Strong stock markets: with 25% in stocks, the portfolio trails stocks during long bull markets.
• Low short-term rates: when yields on short Treasuries are near zero, the cash sleeve earns little.

Alternatives

The Permanent Portfolio is one answer to the question of how to hold up in any economy. Investors who want different trade-offs have other options.

• 8 Portfolio Recipes That Beat the Permanent Portfolio: eight recipes that outperformed the Permanent Portfolio.
• Permanent Plus recipe: keeps the Permanent Portfolio structure but drops the cash sleeve to allow a higher return while increasing risk, splitting the portfolio equally among large-cap growth stocks (IWF), long-term Treasuries (TLT) and gold (GLD).

FAQ

Is the Permanent Portfolio still a good investment?

Yes for an investor whose priority is limiting large losses and not depending on one economic outcome. It is a weaker fit for an investor seeking the highest long-term growth, because 75% of the portfolio sits outside stocks.

Which ETFs should an investor use?

One ETF per sleeve: a broad U.S. stock ETF such as VTI or VOO, a long-term Treasury ETF such as VGLT or SPTL, a physical gold ETF such as GLDM or IAUM, and a Treasury bill ETF such as SGOV or BIL. The ETF choices above cover the trade-offs in cost, tax treatment and tracking.

How often should an investor rebalance?

Once a year is enough for most investors. Browne’s own rule was to rebalance when any sleeve fell below 15% or rose above 35% of the portfolio. In a taxable account, directing new contributions and withdrawals toward the underweight sleeves reduces the number of taxable sales.

PRPFX or ETFs?

ETFs fit an investor who wants Browne’s equal four-part design at the lowest cost: about 0.06% to 0.2% a year versus 0.79% for PRPFX, exact 25% weights and control over taxable sales. PRPFX fits an investor who wants a single actively managed fund with a broader mix that includes silver, Swiss franc assets and resource stocks, and who accepts the higher fee. The two are different portfolios, and the 20-year results table shows how each performed.