Warren Buffett Portfolio
Created by Warren Buffett
The simple 90/10 split Buffett said he directed for his own family's inheritance.
What is it?
The Warren Buffett Portfolio refers to the simple allocation Buffett famously described in a letter to Berkshire Hathaway shareholders as his instructions for a trust benefiting his wife: 90% in a low-cost S&P 500 index fund and 10% in short-term government bonds.
The philosophy
Buffett's reasoning is straightforward and consistent with his broader public investing philosophy: over long periods, American businesses as a group have grown and compounded wealth, and very few investors — professional or otherwise — can reliably beat the return of simply owning that growth through a low-cost index fund after fees are accounted for. The small bond allocation exists purely as a liquidity buffer, giving the portfolio's beneficiary a source of cash that is not exposed to stock market swings, not as a meaningful risk-reduction tool in its own right.
How it works
The overwhelming majority of the portfolio, 90%, is invested in a fund tracking the S&P 500, giving the holder ownership in roughly the 500 largest publicly traded US companies weighted by market value. The remaining 10% sits in short-term government bonds, which are low-volatility and highly liquid, intended to cover near-term cash needs or to be drawn down during a stock market decline so the equity sleeve is not forced to be sold at a bad time. There is no rebalancing logic aimed at reducing volatility the way a 60/40 portfolio's bond sleeve is used — this is fundamentally a growth-oriented, equity-dominant allocation.
Who is it for?
This strategy is suited to investors with a very high risk tolerance and a long time horizon who are comfortable with the full volatility of the US stock market and want to keep essentially all of it, treating the small bond sleeve purely as an emergency-liquidity buffer rather than a genuine risk-reduction device. It is not designed for investors nearing retirement or those who would be forced to sell equities during a downturn to meet near-term expenses.
Key strengths & trade-offs
Its strength is capturing nearly the full long-run growth of the US stock market with minimal complexity and minimal cost — a single index fund does almost all of the work. Its trade-off is a near-total lack of diversification beyond US large-cap stocks: no international exposure, no small-cap or value tilt, no real estate, no inflation hedge, and full exposure to the S&P 500's historical peak-to-trough drawdowns of 40-50% or more during severe bear markets.
Risk Level
Rebalancing
annual
Number of Assets
2
Best For
Long time horizons, higher risk tolerance
Current Allocation
| US Large Cap | 90% |
| US Short-Term Bonds | 10% |
Performance: 29.9-Year Backtest
Data for US Large Cap starts 1993. Simulation covers 29.9 years.
$10,000 initial investment → $161,271
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 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Warren Buffett Portfolio | +19.4% | +25.5% | +29.2% | +9.6% | +0.4% | -13.7% | -19.9% | +30.5% | +5.6% | +9.0% | +13.7% | -1.5% | -34.2% | +28.2% | +20.2% | +3.8% | +14.9% | +19.3% | +12.9% | -0.7% | +17.9% | +23.6% | -1.9% | +19.6% | +15.7% | +20.8% | -7.6% | +18.9% | +24.0% | +15.2% | +7.4% |
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.