All Weather

Moderate Classic Allocation

Inspired by Ray Dalio's risk parity concept. Designed to perform reasonably well in any economic environment — growth, recession, inflation, or deflation. Heavy on bonds and real assets.

5
ETFs
1.8%
Aggregate Yield
$49.9B
Wtd Avg AUM

Holdings

Symbol Name Weight Price 1D 3M YTD Yield AUM
ITOT iShares Core S&P Total U.S. Stock Market ETF 30% $148.68 ... ... ... 1.1% $83.4B
TLT iShares 20+ Year Treasury Bond ETF 40% $86.50 ... ... ... 3.8% $42.2B
IEF iShares 7-10 Year Treasury Bond ETF 15% $95.29 ... ... ... 3.2% $49.0B
AAAU Goldman Sachs Physical Gold ETF Shares 7% $46.94 ... ... ... — $2.9B
PDBC Invesco Actively Managed Exch-Traded Commodity Fd Tr Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF 8% $16.98 ... ... ... 3.0% $6.4B

Investment Thesis

The core insight behind risk parity is that traditional portfolios are dominated by equity risk — a 60/40 portfolio gets roughly 90% of its risk from stocks. The All Weather approach instead allocates risk equally across four economic regimes: rising growth, falling growth, rising inflation, and falling inflation. Each regime has assets that perform well in it. Long-term treasuries protect against deflation, commodities and gold hedge inflation, and equities capture economic growth. The heavy bond weighting might seem conservative, but bonds are less volatile per dollar invested, so they need more capital to contribute equal risk. Historically, this portfolio has lower drawdowns than traditional allocations with competitive long-term returns.

Portfolio Construction

ITOT iShares Core S&P Total U.S. Stock Market ETF
30%
US equity growth engine — captures economic expansion. Only 30% because equities are the most volatile asset class and contribute outsized risk even at smaller allocations.
Yield: 1.1% AUM: $83.4B
TLT iShares 20+ Year Treasury Bond ETF
40%
Long-term treasuries for deflation protection — the largest allocation because long bonds are the best-performing asset during deflationary recessions and financial crises. They rallied 40%+ during the 2008 crisis.
Yield: 3.8% AUM: $42.2B
IEF iShares 7-10 Year Treasury Bond ETF
15%
Intermediate treasuries for stability — less volatile than long bonds, providing a more stable income stream and moderate duration exposure.
Yield: 3.2% AUM: $49.0B
AAAU Goldman Sachs Physical Gold ETF Shares
7%
Gold as inflation hedge — physical gold backed by the Goldman Sachs vault. Central bank buying and currency debasement concerns make gold a key portfolio diversifier.
AUM: $2.9B
PDBC Invesco Actively Managed Exch-Traded Commodity Fd Tr Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF
8%
Broad commodities for inflation — energy, agriculture, and metals. These real assets tend to perform best during inflationary periods when financial assets struggle.
Yield: 3.0% AUM: $6.4B

Key Considerations

  • Lower returns in strong bull markets compared to equity-heavy portfolios
  • Gold and commodities can be dead money for extended periods
  • The 2022 regime (stocks and bonds falling, commodities rising) tested the framework
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