David Swensen Unconventional Success Portfolio

Background

The Unconventional Success Portfolio was developed by David Swensen, the long-time Chief Investment Officer of Yale University and one of the most respected figures in institutional investing. Swensen’s work revolutionized how endowments and individual investors think about diversification and long-term strategy. In his book Unconventional Success: A Fundamental Approach to Personal Investment, he outlined a simple yet sophisticated framework for individual investors—an adaptation of the Yale endowment philosophy using only publicly available, low-cost index funds. His approach emphasizes disciplined asset allocation, patience, and reliance on market efficiency rather than prediction or speculation.

Primary Goals

The primary goal of Swensen’s portfolio is to achieve equity-oriented long-term growth through diversified global exposure while maintaining stability and protection against inflation and deflation. Swensen believed that individual investors could approximate institutional results by building a portfolio rooted in fundamental economic logic rather than market timing or active management. A secondary goal is behavioral discipline—to give investors a straightforward plan that encourages consistency, rebalancing, and emotional control through market cycles.

The portfolio is designed to respond predictably across major economic conditions:

• Economic expansion: U.S. and international equities drive growth as global corporate earnings rise.
• Inflationary periods: Real estate holdings provide income and partial protection against rising prices.
• Deflation or slowing growth: Intermediate and long-term Treasury bonds offer stability and price appreciation as yields decline.
• Market volatility: Diversification across geographies and asset types mitigates drawdowns and promotes long-term balance.

Overall, the strategy seeks to deliver steady, inflation-adjusted returns over time through disciplined diversification and periodic rebalancing.

Construction

Swensen’s portfolio divides assets across six core asset classes to reflect the global economy and the major sources of return and risk. Each plays a distinct role in balancing growth, income, and stability:

• U.S. equities: Broad ownership of American companies drives long-term growth and serves as the foundation of the portfolio.
• Real estate (REITs): Adds exposure to income-producing property, offering diversification and a natural hedge against inflation.
• Developed international equities: Provide access to advanced economies outside the U.S., reducing regional and currency concentration.
• Emerging market equities: Capture higher-growth opportunities in developing economies, increasing overall return potential.
• Intermediate-term Treasury bonds: Supply income and moderate volatility, performing well during economic slowdowns.
• Long-term Treasury bonds: Offer strong protection in deflationary periods and during equity market downturns.

A representative allocation often used to express Swensen’s framework includes approximately 30% U.S. stocks, 20% real estate, 15% developed international stocks, 5% emerging markets, 15% intermediate-term Treasuries, and 15% long-term Treasuries. This blend provides global diversification, income stability, and a balance between risk and reward consistent with Swensen’s enduring investment principles.

Performance & Returns

Total Return by Period

Updated: Nov 18, 2025

1 Day	1 Week	28 Days	90 Days	1 Year	3 Years	5 Years	10 Years
-0.27%	-2.11%	-2.00%	1.85%	6.87%	25.34%	15.09%	54.00%

Total Return by Year

2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
7.38%	14.01%	-21.27%	16.04%	11.96%	22.44%	-5.62%	14.79%	6.99%	-0.29%

10 Year Performance

Total Return	Annualized Return	CAGR	Max Drawdown	Sharpe Ratio	Sortino Ratio	Calmar Ratio	Ulcer Index
54.00%	5.04%	4.42%	-43.83%	0.17	0.21	0.11	0.10

Asset Allocation

Symbol	Description	Weight %
VTI	Vanguard Total Stock Market ETF	30.0
VNQ	Vanguard Real Estate ETF	20.0
VEA	Vanguard FTSE Developed Markets ETF	15.0
EEM	iShares MSCI Emerging Markets ETF	5.0
IEF	iShares 7-10 Year Treasury Bond ETF	15.0
TLT	iShares 20+ Year Treasury Bond ETF	15.0

Total Return Graph

Comparisons with Other Portfolios