Larry Swedroe Minimize FatTails Portfolio
The Larry Swedroe Minimize Fat Tails Portfolio is a diversified investment strategy designed to reduce the impact of extreme market events or "fat tails" on the portfolio's performance. It allocates assets across domestic small-cap value equities (IJS), emerging markets equities (VWO), and fixed income through TIPS bonds (TIP) and short-term Treasury bonds (SHY). The 70% allocation to bonds (TIP and SHY) provides stability and income, while the 30% allocation to equities (IJS and VWO) offers potential capital appreciation and diversification. This portfolio is suitable for conservative investors seeking to minimize the impact of market extremes while maintaining a balance between income generation and modest growth potential.
Asset Allocation
| Position | Category/Sector | Target Weight |
|---|---|---|
IJS iShares S&P SmallCap 600 Value ETF | Small Cap Value Equities | 15% |
SHY iShares 1-3 Year Treasury Bond ETF | Government Bonds | 35% |
TIP iShares TIPS Bond ETF | Inflation-Protected Bonds | 35% |
VWO Vanguard FTSE Emerging Markets ETF | Emerging Markets Equities | 15% |
Performance
Performance Chart
The chart shows the growth of an initial investment of $10,000 in Larry Swedroe Minimize FatTails Portfolio, comparing it to the performance of the S&P 500 index or another benchmark. All prices have been adjusted for splits and dividends. The portfolio is rebalanced Every 3 months.
The earliest data available for this chart is Mar 10, 2005, corresponding to the inception date of VWO
Returns By Period
As of May 10, 2025, the Larry Swedroe Minimize FatTails Portfolio returned 0.72% Year-To-Date and 3.36% of annualized return in the last 10 years.
| YTD | 1M | 6M | 1Y | 5Y* | 10Y* | |
|---|---|---|---|---|---|---|
^GSPC S&P 500 | -3.77% | 3.72% | -5.60% | 8.55% | 14.11% | 10.45% |
| Larry Swedroe Minimize FatTails Portfolio | 0.72% | 2.07% | -1.02% | 4.91% | 4.30% | 3.36% |
| Portfolio components: | ||||||
IJS iShares S&P SmallCap 600 Value ETF | -12.66% | 4.21% | -17.33% | -4.66% | 12.74% | 6.55% |
TIP iShares TIPS Bond ETF | 3.53% | 0.35% | 1.94% | 5.74% | 1.42% | 2.39% |
VWO Vanguard FTSE Emerging Markets ETF | 5.13% | 8.85% | 1.34% | 10.07% | 8.14% | 3.65% |
SHY iShares 1-3 Year Treasury Bond ETF | 1.93% | 0.19% | 2.50% | 5.50% | 1.06% | 1.40% |
Monthly Returns
The table below presents the monthly returns of Larry Swedroe Minimize FatTails Portfolio, with color gradation from worst to best to easily spot seasonal factors. Returns are adjusted for dividends.
| Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | Total | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2025 | 0.99% | 0.31% | -0.32% | -0.55% | 0.30% | 0.72% | |||||||
| 2024 | -1.11% | 0.34% | 1.13% | -1.58% | 1.86% | 0.37% | 2.98% | 0.50% | 2.02% | -1.53% | 1.58% | -1.78% | 4.74% |
| 2023 | 4.03% | -2.05% | 0.89% | -0.32% | -1.54% | 1.64% | 1.91% | -1.84% | -2.02% | -1.57% | 3.69% | 3.76% | 6.46% |
| 2022 | -1.56% | -0.09% | -1.56% | -2.76% | 0.26% | -3.18% | 2.81% | -1.96% | -5.87% | 2.17% | 3.56% | -1.84% | -9.94% |
| 2021 | 1.51% | 1.33% | 0.75% | 1.04% | 1.23% | 0.29% | -0.54% | 0.51% | -1.01% | 0.89% | -0.55% | 0.90% | 6.49% |
| 2020 | -0.83% | -1.31% | -5.88% | 4.42% | 1.13% | 1.95% | 2.52% | 1.51% | -1.15% | 0.50% | 4.71% | 2.66% | 10.20% |
| 2019 | 3.88% | 0.58% | 0.58% | 1.11% | -1.66% | 2.30% | 0.01% | -0.18% | 0.50% | 0.99% | 0.57% | 1.70% | 10.79% |
| 2018 | 1.09% | -1.86% | 0.60% | -0.28% | 0.79% | -0.29% | 0.79% | 0.16% | -1.07% | -3.12% | 1.08% | -1.75% | -3.89% |
| 2017 | 1.03% | 0.71% | 0.39% | 0.53% | -0.18% | 0.23% | 1.15% | 0.50% | 0.84% | 0.51% | 0.47% | 0.83% | 7.22% |
| 2016 | -0.95% | 0.73% | 3.80% | 0.56% | -0.69% | 1.84% | 1.75% | 0.10% | 0.74% | -0.72% | 0.45% | 0.44% | 8.25% |
| 2015 | 0.53% | 0.95% | -0.25% | 1.09% | -0.79% | -0.68% | -1.15% | -2.46% | -0.94% | 1.85% | -0.11% | -1.74% | -3.72% |
| 2014 | -1.00% | 1.30% | 0.64% | 0.28% | 1.33% | 1.16% | -0.62% | 1.51% | -2.93% | 1.80% | 0.00% | -0.76% | 2.64% |
Expense Ratio
Larry Swedroe Minimize FatTails Portfolio has an expense ratio of 0.17%, which is considered low. Below, you can find the expense ratios of the portfolio's funds side by side and easily compare their relative costs.
Risk-Adjusted Performance
Risk-Adjusted Performance Rank
The current rank of Larry Swedroe Minimize FatTails Portfolio is 70, indicating average performance compared to other portfolios on our website. Here’s a breakdown of how it compares using common performance measures.
Risk-Adjusted Performance Indicators
This table presents a comparison of risk-adjusted performance metrics for positions. Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.
| Sharpe ratio | Sortino ratio | Omega ratio | Calmar ratio | Martin ratio | |
|---|---|---|---|---|---|
IJS iShares S&P SmallCap 600 Value ETF | -0.20 | -0.04 | 1.00 | -0.12 | -0.35 |
TIP iShares TIPS Bond ETF | 1.24 | 1.78 | 1.23 | 0.59 | 3.82 |
VWO Vanguard FTSE Emerging Markets ETF | 0.55 | 0.92 | 1.12 | 0.54 | 1.77 |
SHY iShares 1-3 Year Treasury Bond ETF | 3.34 | 5.70 | 1.74 | 5.75 | 16.25 |
Dividends
Dividend yield
Larry Swedroe Minimize FatTails Portfolio provided a 3.17% dividend yield over the last twelve months.
| TTM | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Portfolio | 3.17% | 3.00% | 2.74% | 3.73% | 2.20% | 1.17% | 2.09% | 2.24% | 1.63% | 1.33% | 1.03% | 1.35% |
| Portfolio components: | ||||||||||||
IJS iShares S&P SmallCap 600 Value ETF | 2.04% | 1.78% | 1.42% | 1.47% | 1.52% | 1.00% | 1.66% | 1.75% | 1.41% | 1.22% | 1.59% | 1.41% |
TIP iShares TIPS Bond ETF | 2.91% | 2.52% | 2.73% | 6.96% | 4.28% | 1.17% | 1.75% | 2.71% | 2.07% | 1.48% | 0.34% | 1.67% |
VWO Vanguard FTSE Emerging Markets ETF | 3.06% | 3.20% | 3.52% | 4.11% | 2.63% | 1.91% | 3.24% | 2.88% | 2.30% | 2.52% | 3.26% | 2.86% |
SHY iShares 1-3 Year Treasury Bond ETF | 3.95% | 3.92% | 2.99% | 1.30% | 0.24% | 0.94% | 2.12% | 1.72% | 0.98% | 0.71% | 0.54% | 0.36% |
Drawdowns
Drawdowns Chart
The Drawdowns chart displays portfolio losses from any high point along the way. Drawdowns are calculated considering price movements and all distributions paid, if any.
Worst Drawdowns
The table below displays the maximum drawdowns of the Larry Swedroe Minimize FatTails Portfolio. A maximum drawdown is a measure of risk, indicating the largest reduction in portfolio value due to a series of losing trades.
The maximum drawdown for the Larry Swedroe Minimize FatTails Portfolio was 21.61%, occurring on Mar 9, 2009. Recovery took 153 trading sessions.
The current Larry Swedroe Minimize FatTails Portfolio drawdown is 1.60%.
Depth | Start | To Bottom | Bottom | To Recover | End | Total |
|---|---|---|---|---|---|---|
| -21.61% | May 20, 2008 | 202 | Mar 9, 2009 | 153 | Oct 14, 2009 | 355 |
| -14.59% | Nov 10, 2021 | 224 | Sep 30, 2022 | 494 | Sep 19, 2024 | 718 |
| -13.45% | Jan 21, 2020 | 41 | Mar 18, 2020 | 56 | Jun 8, 2020 | 97 |
| -9.76% | Apr 27, 2015 | 187 | Jan 21, 2016 | 138 | Aug 8, 2016 | 325 |
| -6.99% | Jul 25, 2011 | 50 | Oct 3, 2011 | 72 | Jan 17, 2012 | 122 |
Volatility
Volatility Chart
The current Larry Swedroe Minimize FatTails Portfolio volatility is 2.07%, representing the average percentage change in the investments's value, either up or down over the past month. The chart below shows the rolling one-month volatility.
Diversification
Diversification Metrics
Number of Effective Assets
The portfolio contains 4 assets, with an effective number of assets of 3.45, reflecting the diversification based on asset allocation. This number of effective assets suggests a highly concentrated portfolio, where a few assets dominate the allocation, potentially increasing the portfolio's risk due to lack of diversification.
Asset Correlations Table
| ^GSPC | TIP | SHY | VWO | IJS | Portfolio | |
|---|---|---|---|---|---|---|
| ^GSPC | 1.00 | -0.11 | -0.20 | 0.74 | 0.82 | 0.78 |
| TIP | -0.11 | 1.00 | 0.62 | -0.06 | -0.12 | 0.24 |
| SHY | -0.20 | 0.62 | 1.00 | -0.14 | -0.19 | 0.07 |
| VWO | 0.74 | -0.06 | -0.14 | 1.00 | 0.65 | 0.84 |
| IJS | 0.82 | -0.12 | -0.19 | 0.65 | 1.00 | 0.82 |
| Portfolio | 0.78 | 0.24 | 0.07 | 0.84 | 0.82 | 1.00 |
AI Insight on Diversification
The portfolio is moderately diversified with a mix of asset classes showing varying degrees of correlation that influence its overall risk profile. The highest correlations among individual positions are between VWO (an emerging markets equity ETF) and IJS (a small-cap value equity ETF) at 0.65, indicating these equity components move somewhat in tandem, which may reduce diversification benefits within the equity sleeve. Additionally, the portfolio’s correlation with VWO (0.84) and IJS (0.82) is quite high, suggesting these two positions dominate the portfolio’s behavior and likely contribute the most to its overall risk and return characteristics.
In contrast, SHY (short-term Treasury bonds) and TIP (Treasury Inflation-Protected Securities) show moderate correlation with each other (0.62) and very low or slightly negative correlations with the equity positions (VWO and IJS), which helps to provide diversification benefits by reducing portfolio volatility during equity market downturns. The portfolio’s low correlation with SHY (0.07) and moderate correlation with TIP (0.24) indicate that these fixed income positions serve as stabilizers but do not dominate the portfolio’s movements.
The negative correlations between SHY and the equity positions (around -0.14 to -0.19) and between TIP and equity positions (around -0.06 to -0.12) are beneficial for diversification, as they suggest these fixed income assets can offset some equity risk. However, the relatively high correlation between VWO and IJS limits diversification on the equity side, concentrating risk in small-cap and emerging market equities.
Overall, the portfolio is not highly concentrated but leans toward equity risk dominated by VWO and IJS. The inclusion of SHY and TIP adds valuable diversification and risk mitigation, but the portfolio could benefit from additional low-correlation assets or further diversification within equities to reduce the impact of correlated equity positions.