Rob Arnott's 'Ultimate' Asset Allocation Portfolio

Published: February 3, 2014

In a recent Wall Street Journal article by Brett Arends, Rob Arnott of Research Affiliates suggested that an all-weather, universal, "ultimate" portfolio for asset allocation should consist of equal parts stocks, bonds, commodities, and real estate. Arnott added that this portfolio should also include global and emerging market stocks and bonds.

 

We're intrigued by this suggestion, but how could we implement this "ultimate portfolio" and how does it perform on a risk vs. return basis? This article answers these questions.

 

Our approach

 

To create and analyze this Arnott-inspired portfolio, we followed these steps:


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