Core Four Portfolio (Rick Ferri)
Created by Rick Ferri
A four-fund index portfolio that adds a real estate sleeve to the classic Bogleheads mix.
What is it?
The Core Four is a four-fund index portfolio designed by financial advisor and author Rick Ferri. It extends the logic of the Three-Fund Portfolio by carving out a dedicated real estate sleeve, weighting the four funds at 48% US total market, 24% international stocks, 20% total bond market, and 8% REITs.
The philosophy
Ferri, like the Bogleheads community, is a strong advocate of low-cost, broadly diversified index investing over active management or stock-picking. His refinement was the observation that real estate investment trusts behave differently enough from the broader stock market — driven by property values and rental income rather than general corporate earnings — that a dedicated allocation earns its place as a fourth core holding rather than being left as an unintentional side effect of a total-market fund's small built-in REIT weighting.
How it works
The 48% US total market sleeve is the single largest holding, capturing the full breadth of the domestic stock market by capitalization. International stocks (24%) diversify growth exposure globally, maintaining a roughly 2-to-1 domestic-to-international equity tilt. The 20% bond sleeve provides the portfolio's stability and drawdown protection. The 8% REIT allocation adds a modest, deliberate real estate tilt on top of what a total-market fund already provides, for investors who want more real estate exposure than a plain three-fund approach delivers.
Who is it for?
This strategy is aimed at investors who like the Three-Fund Portfolio's index-fund simplicity but specifically want a dedicated real estate allocation, and who are comfortable with a growth-tilted 80% equity/20% bond split — more aggressive than a standard 60/40. It suits longer time horizons where the higher equity weighting has more time to recover from drawdowns.
Key strengths & trade-offs
Its strength is broad, low-cost diversification across domestic equity, international equity, bonds, and real estate, capturing an additional distinct return stream (REITs) that a three-fund portfolio only partially includes. Its trade-off is a relatively high 80% equity weighting, meaning it will experience deeper drawdowns during global stock bear markets than more conservative allocations on this site, and REITs themselves can be highly sensitive to interest rate changes, adding a layer of rate risk beyond the bond sleeve.
Risk Level
Rebalancing
annual
Number of Assets
4
Best For
Long time horizons, higher risk tolerance
Current Allocation
| US Total Market | 48% |
| Total International | 24% |
| US Total Bond Market | 20% |
| REITs | 8% |
Performance: 29.8-Year Backtest
Data for REITs starts 1996. Simulation covers 29.8 years.
$10,000 initial investment → $66,042
Annual Returns
| Strategy | 1996 | 1997 | 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Core Four Portfolio (Rick Ferri) | -1.9% | +16.1% | +13.0% | +12.8% | -0.3% | -1.8% | -11.2% | +6.1% | +6.0% | +6.2% | +5.2% | -3.5% | -32.4% | +33.4% | +20.1% | +1.7% | +12.7% | +12.8% | +10.6% | -4.3% | +15.2% | +19.6% | -3.0% | +15.1% | +14.0% | +12.0% | -8.0% | +10.3% | +16.6% | +17.4% | +6.8% |
Key Metrics
ETFs in This Strategy
Based on historical data. Past performance does not guarantee future results. This site is for educational purposes only and does not constitute investment advice.