Core-4 Asset Classes

Core-4 investing separates the global financial markets into the most important asset classes you need to be truly diversified. These asset classes are then matched to low-cost index funds that mirror the performance of those markets at an exceedingly low cost.

Asset classes used in Core-4 investment portfolios have the following characteristics:

  1. All have an economic purpose that is fundamentally different from each other;
  2. All produce regular cash-flow from interest, dividends or rents;
  3. The historic correlations between asset class returns have resulted in a diversification benefit;
  4. All asset classes can be purchased using a very-low cost index fund or exchange-traded fund.

The Core-4 asset classes are:

  • Stocks: US and international equity
  • Bonds: fixed income including variable rate securities
  • Alternatives: primarily real estate investment trusts (REITs)
  • Cash equivalents*: money market, short-term bonds and bank CDs

*There is a cash component to investing, but it is usually held for current and future expenses, including as a cushion for unforeseen expenses and emergencies. Accordingly, cash is not used as one of the four asset classes in Core-4 Portfolios™, which are designed to be used for an investment horizon of at least five years.

Core-4 Portfolios  

Choosing and managing a mutual fund portfolio isn’t complicated. It’s made to sound complicated by people who charge fees and commissions to do it for you.  Core-4 Portfolios make investing easier by focusing on what’s important. This helps you control cost and set a higher expectation for your return.

Diversification isn’t about the number of funds you own, it’s the type of funds you own. A well-diversified portfolio can be achieved with four funds or less. That’s what Core-4® is all about. There are six strategies currently available. Choose the Core-4 Portfolio that best fits your needs and beliefs, or mix portfolios to make one that’s truly your own.

Classic Core-4Capital appreciation with income using stocks, bonds and real estate

Total Economy Core-4Includes quasi-private equity exposure using small value stocks

Global Markets Core-4Provides exposure to all global stock and bond markets

Inflation Fighter Core-4Includes funds that provide a hedge against inflation

Income Seeker Core-4: Incorporates funds that have higher than average income

Socially Conscious Core-4Excludes certain companies and industries using ESG* standards

*Environmental, Social and Governance standards