Charlie Brown

ETF Investing Guide: A Core ETF Portfolio

Good question. The original guide had suggested percentages but the revised Jul 2006 ETF Investing Guide appears to have removed these and left the reader on their own. Here's the percentages from the original guide: where SP = percentage of stock, and BP = 1 - SP
IVV: SP * 0.25
IJH: SP * 0.25
IWM: SP * 0.25
EFA: SP * 0.0625
EEM: SP * 0.0625
RWR: SP * 0.0625
CASH: SP * 0.0625
LQD: BP * 0.4
SHY: BP * 0.4
IFE: BP * 0.2
This should add up to 100%. For example, if SP = 0.7, then IVV = 17.5%, EFA = 4.375%, LQD = 12%. I realize this does not directly answer your question but you may find these percentages a reasonable starting point.

--Charlie

The Seeking Alpha ETF Investing Guide

Sorry about the data compression. I had everything spaced out nicely in columns but the spaces were removed when the comment was submitted.

--Charlie

The Seeking Alpha ETF Investing Guide

When I first read the ETF Investing Guide it struck a chord in me since I had been trying to find an investment strategy for many years. I had gone through various investment firms, had wrap accounts, a personal financial investor, and lost money in the dotcom crash. After reading the ETF IG I realized that I needed some tools to help implement converting the stocks and mutual funds that I had over into ETFs. So I created a simple 2 sheet excel spreadsheet with the first sheet containing all assets and what categories each asset fell into. The second sheet took the totals from the first sheet and plugged them into the Theoretical column (see example below). The only value the user inputs in the second sheet is the Stock percentage which in this case uses 70%. One could easily add the percentage over/under invested for any asset class that could act as a trigger when to rebalance the portfolio. It takes me about 20 minutes to update this information each quarter.

Difference key: invest more 1,234 Goal Stock 0.70 324,800 Bonds 0.30 139,20
invest less (1,234) Actual 0.69 318,700 0.29 145,300
Difference 6,100 (6,100)

ETF Fund Name Category Expense Percent Theoretical Actual Difference
IVV iShares S&P 500 Ind Fund Large Cap 0.09 17.50 81,200 212700 (131,500)
IJH iShares S&P Mid Cap 400 Mid Cap 0.20 17.50 81,200 11000 70,200
IWM iShares Russell 2000 In Small Cap 0.20 17.50 81,200 35000 46,200
EFA Ishares MSCI EAFE Ind Foreign 0.35 4.38 20,300 60000 (39,700)
EEM Ishares MSCI Emerging Mk Emerging 0.75 4.38 20,300 0 20,300
RWR street TRACTKS Wilshire REIT 0.25 4.38 20,300 0 20,300
CASH Cash Cash 0.00 4.38 20,300 0 20,300

LQD iShares GS Investop Corp Bd Bond Crp 0.15 12.00 55,680 74000 (18,320)
SHY iShares Lehman 1-3 yr Tr Bd Bond Sh 0.15 12.00 55,680 44300 11,380
IEF iShares Lehman 7-10 yr Tr Bond Lng 0.15 6.00 27,840 27000 840
100.00 464,000 464000

--Charlie