Core Four Portfolio: backtest, returns and drawdowns
Four index funds: US stocks, international stocks, real estate and bonds, roughly 80/20 stocks to bonds.
Data updated October 2026
Created by: Rick Ferri
Allocation
| Asset class | ETF used in the backtest | Weight |
|---|---|---|
| US total stock market | VTI | 48% |
| International stocks | VXUS | 24% |
| US real estate (REITs) | VNQ | 8% |
| US aggregate bonds | BND | 20% |
From June 2020 to October 2026 the Core Four Portfolio returned 11.6% a year on average, with annual volatility of 13.0%. Its deepest fall was 24.4%, from January 2022 to October 2022, recovered in about 26 months.
Its best year was 2023 (+18.4%) and its worst 2022 (−18.0%).
Over the same period 100% US stocks returned 16.8% a year with a maximum fall of 25.4%.
Key figures
- Annual return (CAGR)
- +11.6%
- Annual volatility
- 13.0%
- Maximum drawdown
- −24.4%
- Recovery time
- 26 months
- Sharpe
- 0.69
- Sortino
- 0.99
- Worst year
- 2022: −18.0%
- Positive years
- 4/5
Growth of $10,000
Drawdowns
Returns by calendar year
| Year | Core Four Portfolio | 60/40 Portfolio | 100% Stocks |
|---|---|---|---|
| 2026(partial) | +10.2% | +8.0% | +14.7% |
| 2025 | +17.6% | +13.1% | +17.1% |
| 2024 | +13.3% | +14.8% | +23.8% |
| 2023 | +18.4% | +17.9% | +26.1% |
| 2022 | −17.9% | −17.0% | −19.5% |
| 2021 | +17.3% | +14.6% | +25.7% |
| 2020(partial) | +19.8% | +16.5% | +26.4% |
How it works
The three-fund idea with a separate real-estate slice for extra diversification.
Backtest with total-return ETF prices (dividends reinvested), rebalanced to target weights on the first trading day of each year. No fees, taxes or currency effects; first and last years are partial. Past results do not predict future returns.
Questions
What is the Core Four Portfolio?
Four index funds: US stocks, international stocks, real estate and bonds, roughly 80/20 stocks to bonds. Allocation: 48% us total stock market, 24% international stocks, 8% us real estate (reits), 20% us aggregate bonds. Created by: Rick Ferri.
What is the Core Four Portfolio return?
In the backtest from June 2020 to October 2026 it returned 11.6% a year on average, with a maximum drawdown of 24.4%. US dollars, before fees and taxes.
How often should it be rebalanced?
The backtest rebalances once a year back to the target weights. Rebalancing more often changes little and adds costs; some investors rebalance only when a weight drifts beyond a threshold.
What was the worst drawdown of the Core Four Portfolio?
24.4%, from January 2022 to October 2022; it took about 26 months to get back to the previous high.
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- Versione italiana
Source: MarketStack end-of-day prices. Historical and educational content: not a forecast and not investment advice. MEDGE Capital does not recommend buying or selling any instrument. Risk disclaimer.