Want A Simple, 3-ETF Portfolio? Here Are 25 Of Them

by on July 24, 2013 | Updated February 25, 2014 | ETFs Mentioned:

Exchange-traded products have found their way into countless portfolios as investors of all walks have embraced these financial instruments for their ease-of-use, cost-efficiency, and unparalleled transparency. Institutional and self-directed money managers alike have taken advantage of ETFs as they offer instant diversification along with the ability to easily tap into virtually any asset class around the globe; with over 1,400 products on the market, there is an ETF for almost everything imaginable, spanning from gold funds to emerging markets small caps to international bonds and everything in between [Download 101 ETF Lessons Every Financial Advisor Should Learn]. 

A recent WSJ article by Anna Prior highlights the sheer diversity among products in the ETF universe and how investors can actually build fairly complete portfolios with just a few funds. In the spirit of simplicity, below we outline 25 All-ETF portfolios, each comprised of just three funds in total; please note that investors should adjust the suggested allocations within each of the strategies to better suite their individual risk preferences and current income needs.

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25. Global Stocks & Bonds

This strategy spans the entire globe, covering both equity and fixed income asset classes from both developed and emerging markets:

Ticker ETF Allocation
VTI Total Stock Market ETF 50%
VEU FTSE All World Ex US ETF 30%
FWDB Madrona Forward Global Bond ETF 20%
  Portfolio Expense Ratio 0.26%

24. U.S. Total Market

This strategy is geared towards investors who are wary of international markets and would prefer to get foreign exposure tangentially through U.S. companies with overseas operations; a small bond component is also included to add diversification:

Ticker ETF Allocation
RSP S&P Equal Weight ETF 40%
SCHA U.S. Small-Cap ETF 40%
BND Total Bond Market ETF 20%
  Portfolio Expense Ratio 0.22%

23. Foreign Growth

This portfolio is not for the risk-averse as it focuses entirely on foreign developed and emerging markets equity funds along with an ex-U.S. bond component:

Ticker ETF Allocation
SCHF International Equity ETF 60%
DGS Emerging Market SmallCap Fund 20%
BWX SPDR Barclays Intl Treasury Bond 20%
  Portfolio Expense Ratio 0.28%

22. Low Volatility

Anyone with capital preservation as a top priority ought to consider this “safer” equity-centric strategy:

Ticker ETF Allocation
SPLV S&P 500 Low Volatility Portfolio 50%
EFAV MSCI EAFE Minimum Volatility ETF 30%
EEMV MSCI Emerging Markets Minimum Volatility ETF 20%
  Portfolio Expense Ratio 0.24%

21. Ex-Financials

This is another strategy geared towards more risk-averse investors who wish to entirely steer clear of the infamous financials sector:

Ticker ETF Allocation
DTN Dividend ex-Financials Fund 50%
DOO International Dividend ex-Financials Fund 25%
ENGN Industrials Bond ETF 25%
  Portfolio Expense Ratio 0.41%

20. U.S. Dollar-Denominated

This strategy offers international stock and bond exposure while at the same time circumventing the inherent currency risk by utilizing U.S. dollar-denominated funds:

Ticker ETF Allocation
DBEF MSCI EAFE Hedged Equity Fund 60%
DBEM MSCI Emerging Markets Hedged Equity Fund 20%
EMB J.P. Morgan USD Emerging Markets Bond ETF 20%
  Portfolio Expense Ratio 0.47%

 19. BRIC Bull

The name says it all, this strategy delivers targeted exposure to the BRIC markets:

Ticker ETF Allocation
EWZ MSCI Brazil Capped ETF 25%
RSX Market Vectors Russia ETF 25%
FNI ISE Chindia Index Fund 50%
  Portfolio Expense Ratio 0.61%

18. Ex-Europe

Investors looking to steer clear of the debt-burdened currency bloc, but still wish to maintain international exposure, ought to consider this strategy:

Ticker ETF Allocation
SCHB U.S. Broad Market ETF 50%
VPL FTSE Pacific ETF 30%
ILF Latin America 40 ETF 20%
  Portfolio Expense Ratio 0.16%

17. Cyclical-Tilt

This strategy focuses on the most cyclical sectors, and as such, should appeal to bullish investors with a stomach for volatility:

Ticker ETF Allocation
IPW SPDR S&P International Energy Sector ETF 40%
IPK SPDR S&P International Technology Sector ETF 40%
BJK Market Vectors Gaming ETF 20%
  Portfolio Expense Ratio 0.53%

16. Global Consumers

As a complement to the Cyclical-Tilt Portfolio, this strategy is based around consumer staples exposure across the entire globe, covering both developed and emerging markets; the bond component is heavily tilted towards consumer staples as well:

Ticker ETF Allocation
KXI Global Consumer Staples ETF 50%
ECON Emerging Markets Consumer 25%
ENGN Industrials Bond ETF 25%
  Portfolio Expense Ratio 0.53%

15. Commodity Bull

This strategy is intended for those with a bullish outlook on the global economy and is balanced between commodity stocks and futures-based exposure to natural resource prices:

Ticker ETF Allocation
HAP Market Vectors Hard Assets Producers ETF 40%
MOO Market Vectors Agribusiness ETF 40%
RJI Rogers International Commodity ETN 20%
  Portfolio Expense Ratio 0.56%

14. ex-Japan

It’s no secret that Asian markets are going to account for a growing share of global GDP growth over the coming years; however, Japan has long been stuck in rut, and as such, this strategy entirely avoids exposure to this developed market in an otherwise booming region:

Ticker ETF Allocation
AAXJ MSCI All Country Asia ex Japan Index Fund 50%
GMF SPDR S&P Emerging Asia Pacific ETF 30%
AUNZ Australia & New Zealand Debt Fund 20%
  Portfolio Expense Ratio 0.60%

13. Warren Buffett Clone

This strategy revolves around the investment principles embraced by the Wall Street legend:

Ticker ETF Allocation
MOAT Market Vectors Wide Moat Research ETF 40%
VIG Dividend Appreciation ETF 40%
EES SmallCap Earnings Fund 20%
  Portfolio Expense Ratio 0.31%

12. Monthly Income

This strategy should appeal to conservative investors or those nearing retirement and in search of meaningful current income; each of the components here pays out a monthly dividend:

Ticker ETF Allocation
SDIV SuperDividend ETF 40%
KBWD KBW High Dividend Yield Financial Portfolio 30%
BND Total Bond Market ETF 30%
  Portfolio Expense Ratio 0.37%

11. Emerging Markets Fever

This portfolio is intended for aggressive, long-term investors who wish to tap into the world’s fastest growing economies:

Ticker ETF Allocation
VWO Emerging Markets ETF 50%
EWX SPDR S&P Emerging Markets Small Cap ETF 25%
FM MSCI Frontier 100 Index Fund 25%
  Portfolio Expense Ratio 0.45%

10. Commodity Countries

This strategy offers tangential exposure to commodity markets by focusing on the world’s largest producers of natural resources:

Ticker ETF Allocation
ABCS ABC High Dividend ETF 40%
GUNR Morningstar Global Upstream Natural Resources Index Fund 40%
CCX Dreyfus Commodity Currency Fund 20%
  Portfolio Expense Ratio 0.56%

9. Ultra-Cheap

The name says it all, this is a traditional stock-bond portfolio with the distinguishing feature being its rock-bottom expense ratio:

Ticker ETF Allocation
SCHB U.S. Broad Market ETF 50%
VEA Europe Pacific 30%
SCHZ U.S. Aggregate Bond ETF 20%
  Portfolio Expense Ratio 0.07%

8. Hedge Fund Clone

For anyone looking to replicate the strategies of professional money managers, this is a great starting point:

Ticker ETF Allocation
MCRO IQ Hedge Macro Tracker ETF 35%
LSC S&P CTI ETN 35%
WDTI Managed Futures Strategy Fund 30%
  Portfolio Expense Ratio 0.81%

7. Retirement-Ready

Unlike most of the other strategies covered here, this portfolio is bond-heavy and geared towards very conservative investors who wish to preserve capital and generate a steady stream of income:

Ticker ETF Allocation
VIG Dividend Appreciation ETF 20%
BND Total Bond Market ETF 60%
TIP TIPS Bond ETF 20%
  Portfolio Expense Ratio 0.12%

6. Growth-Tilt

This strategy is geared towards aggressive investors with a very long-term horizon in mind:

Ticker ETF Allocation
IWZ Russell 3000 Growth ETF 50%
EFG MSCI EAFE Growth ETF 30%
EGRW MSCI Emerging Markets Growth Index Fund 20%
  Portfolio Expense Ratio 0.34%

5. Storm Proof

This strategy looks to weather all economic environments by holding onto three asset classes that have historically generated stable returns over the long-haul:

Ticker ETF Allocation
XLP Consumer Staples Select Sector SPDR 50%
PLW 1-30 Treasury Ladder Portfolio 30%
DBP DB Precious Metals Fund 20%
  Portfolio Expense Ratio 0.32%

4. All About Dividends

With interest rates still stuck at historically low levels, this strategy should appeal to anyone looking to generate meaningful current income:

Ticker ETF Allocation
LVL S&P Global Dividend Opportunities Index ETF 60%
HYG iBoxx $ High Yield Corporate Bond ETF 25%
EMHY Emerging Markets High Yield Bond Fund 15%
  Portfolio Expense Ratio 0.58%

3. Tax Escape

This strategy is intended for investors that fall in the high-income tax bracket, and as such, it avoids dividend-paying securities; the bond component is also made up entirely of municipal debt, which is tax-exempt:

Ticker ETF Allocation
IWF Russell 1000 Growth ETF 50%
VBK Small-Cap Growth ETF 20%
MUB National AMT-Free Muni Bond ETF 30%
  Portfolio Expense Ratio 0.20%

2. Big Bear

Anyone looking to go against the bull trend should consider this strategy; however, note that the holdings here are intended to serve as complements to a traditional long-only portfolio:

Ticker ETF Allocation
DEF Defensive Equity ETF 50%
HDGE Active Bear ETF 30%
UUP DB USD Index Bullish 20%
  Portfolio Expense Ratio 0.96%

1. All Abroad

Since most investors’ portfolios tend to have a glaring home-country bias, this strategy looks to avoid direct exposure to U.S. stocks and bonds:

Ticker ETF Allocation
VEU FTSE All World Ex US ETF 65%
IGOV S&P/Citigroup International Treasury Fund 20%
ELD Emerging Markets Local Debt Fund 15%
  Portfolio Expense Ratio 0.25%

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Disclosure: No positions at time of writing.