No-Brainer Portfolio: backtest, returns and drawdowns
Four equal quarters: the S&P 500, US small caps, foreign stocks and short-term bonds.
Data updated October 2026
Created by: William Bernstein
Allocation
| Asset class | ETF used in the backtest | Weight |
|---|---|---|
| S&P 500 | IVV | 25% |
| US small caps | IJR | 25% |
| International developed stocks | EFA | 25% |
| Short-term US Treasuries | SHY | 25% |
- Stocks 75%
- Bonds 25%
From October 2011 to October 2026 the No-Brainer Portfolio returned 9.2% a year on average, with annual volatility of 12.6%. Its deepest fall was 26.8%, from January 2020 to March 2020, recovered in about 10 months.
Its best year was 2013 (+23.6%) and its worst 2022 (−13.1%).
Over the same period 100% US stocks returned 14.3% a year with a maximum fall of 35.0%.
Key figures
- Annual return (CAGR)
- +9.2%
- Annual volatility
- 12.6%
- Maximum drawdown
- −26.8%
- Recovery time
- 10 months
- Sharpe
- 0.64
- Sortino
- 0.90
- Worst year
- 2022: −13.1%
- Positive years
- 11/14
Growth of $10,000
Drawdowns
Returns by calendar year
| Year | No-Brainer Portfolio | 60/40 Portfolio | 100% Stocks |
|---|---|---|---|
| 2026(partial) | +9.2% | +6.9% | +12.7% |
| 2025 | +15.1% | +13.0% | +17.0% |
| 2024 | +10.2% | +14.8% | +23.8% |
| 2023 | +16.2% | +17.9% | +26.1% |
| 2022 | −13.2% | −16.9% | −19.5% |
| 2021 | +16.5% | +14.6% | +25.7% |
| 2020 | +10.1% | +15.4% | +20.7% |
| 2019 | +19.9% | +21.9% | +30.7% |
| 2018 | −6.3% | −3.1% | −5.3% |
| 2017 | +15.1% | +14.2% | +21.4% |
| 2016 | +10.0% | +8.3% | +12.1% |
| 2015 | −0.5% | +0.2% | −0.1% |
| 2014 | +3.3% | +9.7% | +12.2% |
| 2013 | +23.6% | +18.2% | +31.8% |
| 2012 | +12.6% | +10.4% | +14.7% |
| 2011(partial) | +2.6% | +3.1% | +4.1% |
History
- Created by
- William Bernstein
- Who
- Neurologist turned asset-allocation author
- Year
- 2000
- Source
- William Bernstein’s writings, including The Intelligent Asset Allocator (2000)
- Funds in the backtest
- 4
William Bernstein, a neurologist who became one of the best-known writers on asset allocation, offered the No-Brainer as the simplest sensible starting point for an index investor: four funds in equal parts, with nothing to decide beyond rebalancing once a year.
The four quarters – the S&P 500, US small companies, foreign stocks and short-term bonds – give exposure to the main sources of equity return with a cushion of safe bonds. Bernstein later developed more refined allocations in books such as The Four Pillars of Investing (2002).
Strengths and weaknesses
Strengths
- Four equal slices: nothing to work out
- Adds small caps and foreign stocks to the S&P 500
- Short-term bonds are stable and liquid
Weaknesses
- 75% in stocks: large drawdowns in crashes
- Short-term bonds rise less than long ones when stocks crash
- No real assets
How it works
The simplest sensible index portfolio: the main sources of equity return plus a cushion of safe bonds, with nothing to decide but yearly rebalancing.
Backtest with total-return ETF prices (dividends reinvested), rebalanced to target weights on the first trading day of each year. Where a Vanguard fund has a short price history in our data, an iShares fund on the same market is used (for example ITOT for VTI, IVV for VOO). No fees, taxes or currency effects; first and last years are partial. Past results do not predict future returns.
Questions
Who created the No-Brainer Portfolio?
William Bernstein (neurologist turned asset-allocation author), 2000. Source: William Bernstein’s writings, including The Intelligent Asset Allocator (2000).
What is the No-Brainer Portfolio?
Four equal quarters: the S&P 500, US small caps, foreign stocks and short-term bonds. Allocation: 25% s&p 500, 25% us small caps, 25% international developed stocks, 25% short-term us treasuries. Created by: William Bernstein.
What is the No-Brainer Portfolio return?
In the backtest from October 2011 to October 2026 it returned 9.2% a year on average, with a maximum drawdown of 26.8%. 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 No-Brainer Portfolio?
26.8%, from January 2020 to March 2020; it took about 10 months to get back to the previous high.
Other lazy portfolios
- How to hedge a portfolioGuide
- David Swensen PortfolioCAGR +8.1%
- Core Four PortfolioCAGR +9.9%
- Warren Buffett 90/10 PortfolioCAGR +13.8%
- 100% StocksCAGR +14.3%
- Gone Fishin’ PortfolioCAGR +8.0%
- Merriman 4 Fund ComboCAGR +12.6%
- Second Grader’s PortfolioCAGR +11.2%
- JL Collins Simple Path PortfolioCAGR +11.3%
- 60/40 PortfolioCAGR +9.5%
- All lazy portfoliosFull comparison
- 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.