What it is
The foundation of every portfolio we manage: broad ownership of the world’s public companies and high-quality bonds, held through low-cost, liquid funds. It is not a view on any sector or theme. It is the part of the portfolio that is meant to be boring, and it is where most of most clients’ money sits.
How we express it
Global equity across the United States and the rest of the developed and emerging markets, weighted toward the United States; investment-grade bonds with a maturity profile matched to when the client needs the money; and a cash reserve sized in months of spending. Fund choice is driven by cost, tracking and tax efficiency, and we hold the same funds in our own accounts.
How it is sized
By the client’s investment policy. A family drawing on the portfolio holds more in bonds and cash than a foundation with a perpetual horizon; a founder with concentrated company stock holds a core built to look as unlike that stock as possible. The policy sets a range for each piece and a rebalancing rule that trims what has risen and adds to what has fallen.
What would make it wrong
Very little, which is the point. The core assumes that over long periods owning the world’s businesses is rewarded and that high-quality bonds hold their value when equities fall. The second assumption failed in 2022, when both fell together, and the cash reserve exists for exactly that year.
Who it is for
Everyone. Some clients hold only the core, with no thematic sleeve at all, because their policy says so. That is a complete portfolio, not a lesser one.
This material is for informational purposes only and is not a recommendation to buy or sell any security. All investing involves risk, including loss of principal.