Global Markets Core-4

GLOBAL MARKETS CORE-4 PORTFOLIO

The Global Markets Core-4 Portfolio gives investors exposure to stock and bond markets around the world. The international side includes developed and emerging markets. This strategy may be familiar to investors who have their money at Vanguard. It’s the company’s default strategy for Life Strategy Funds and Personal Adviser Service program. Core-4 allocations to the four asset classes are slightly different due to our less robust view of international bonds. The portfolio represents four broadly diversified assets classes:

Total US Stock Market
Total International Stock
US Investment-grade Bonds
International (hedged) Bonds

The US stock portion is represented by a broad index fund of US domiciled companies and corporations outside the US that primarily do business in the US. Developed countries and emerging markets are represented using a total international stock index fund. The US bond portion includes Treasury securities, mortgages, corporate bonds and other investment-grade securities. Last, the portfolio has a slice in international investment grade bonds. It provides exposure to non-U.S. investment-grade bonds, including international government, agency, and corporate securities from mostly developed countries and some emerging markets.

The allocation to international stocks is unhedged, meaning currency fluctuations affect the return. Alternatively, the preferred allocation to international bonds is with a currency hedged, meaning currency fluctuations are factored out. Some people are not big fans of international bonds whether hedged or not. They believe a portfolio can gain enough diversification in U.S. bonds alone and not have to deal with added currency volatility or the cost to hedging.

MODERATE GROWTH GLOBAL MARKETS CORE-4 PORTFOLIO

The Moderate Growth portfolio has an allocation of 60% in equity and 40% in fixed income.

ASSET ALLOCATION SELECTION

CLICK HERE to view the asset allocation of four Global Markets Core-4 Portfolios ranging from Low-risk to Aggressive. More risk in a portfolio means greater short-term volatility and the expectation of higher long-term returns.

For assistance in selecting an appropriate risk level, use the Vanguard Risk Tolerance-Asset Allocation Tool or a similar questionnaire designed to recommend a stock and bond allocation.

FUND SELECTION

CLICK HERE to see suggested mutual funds and exchange-traded funds (ETFs) for each category in the Global Markets Core-4. The fund selection includes the largest in each asset class and three others that are appropriate. The list does not represent the complete universe of suitable funds.

ANALYZE YOUR SECTIONS IN PORTFOLIO VISUALIZER

Here is a PORTFOLIO VISUALIZER analysis for the Global Markets Core-4 Moderate Growth portfolio using funds from the Global Markets Core-4 FUND SELECTION page.

You can change funds by typing in different tickers or fund names from the FUND SELECTION page or your own selections. You can also change the portfolio allocation to each fund by typing in the percentages in each asset class based on the Global Markets Core-4 PORTFOLIO ALLOCATION page or using your own revised allocations. Simply enter the funds you choose and an asset allocation to each to make your analysis. Compare up to three portfolios at once.

The Portfolio Visualizer online portfolio backtesting tool allows you to construct one or more portfolios based on the selected mutual funds, ETFs and stocks to analyze and backtest portfolio returns, risk characteristics, standard deviation, annual returns and rolling returns. The results include a visualization of the portfolio growth chart and rolling returns, CAGR, standard deviation, Sharpe ratio, Sortino ratio, annual returns and inflation adjusted returns. A periodic contribution or withdrawal can also be specified together with the preferred portfolio rebalancing strategy.

GETTING HELP*

Core-4 Adviser Alliance members assist individuals and small institutional investors with all aspects of investment planning, portfolio design and account management. They also provide valuable content to the Core-4 Blog. All advisers must meet strict fiduciary standards. All advisers charge a fee for their services, which vary by firm.

*Core-4 Investing charges a fee to companies that advertise on this website. The blogs and other content provided by advertisers may facilitate their commercial purpose. Neither Core-4 Investing nor its owner guarantees the advice of any service provider; however, we do want to hear about positive and negative experiences.