Ferri Core Four
Rick Ferri's Core Four (Classic Core-4)
Where it stands today
Our calculation, 1926-07 – 2026-09
Growth of $10,000
Where it came from
Rick Ferri is a US investment adviser, chartered financial analyst and author who founded a fee-only advisory firm in 1999 and is known as a champion of low-cost index investing and of the Bogleheads community. He wrote 'All About Asset Allocation' (McGraw-Hill; first edition 2006) and later 'The Power of Passive Investing' and other books. The original Core-4 portfolio is the one Portfolio Charts calls the 'Classic Core-4'.
The Core-4 idea extends the well-known three-fund portfolio (US stocks, international stocks, bonds) by adding a fourth asset class, real estate investment trusts. Ferri's four selection criteria, as summarised by Portfolio Charts, are: each class has a distinct economic purpose, each produces regular cash flow from interest, dividends or rent, their historical correlations give diversification, and each can be held in a very low cost index fund.
The widely quoted Classic Core-4 allocation is 48% US stocks (total market), 24% developed ex-US stocks, 8% US REITs and 20% US bonds (Portfolio Charts lists intermediate-term Treasuries; other descriptions say a total bond market fund or TIPS). This is an 80/20 stock/bond split in which the stock part is divided 60% US, 30% international, 10% REITs (48/24/8 equals 80% of 60/30/10). Ferri's own website now presents six 'Core-4' model portfolios, each with four funds and four risk levels, and states that they are only examples, not recommendations; the 48/24/8/20 mix is one point on that grid.
Sources disagree about the details: MyPlanIQ shows a different weighting (30% US stocks, 24% international, 6% REITs, 40% bonds), which is the same recipe at a more conservative risk level. Portfolio Charts also models later variants, 'Total Economy Core-4' and 'Global Markets Core-4'.
The mix was never a single published formula; Ferri teaches that investors should choose the stock/bond split to fit their risk, then divide stocks in similar proportions. For our purposes we use the 80/20 version because it is the one with a published, repeated set of weights.
What is in it
| US large-cap blend stocks (total US market) | 48% | |
| International large-cap blend stocks (developed ex-US) | 24% | |
| US REITs | 8% | |
| US bonds (intermediate-term) | 20% | Portfolio Charts: intermediate Treasuries; other sources: total bond market |
How we model it
| US large companies (S&P 500) | 48% |
| Developed markets outside the US | 24% |
| US bond market (aggregate) | 20% |
| Real estate (REITs) | 8% |
For a euro investor
How to build it with European funds
| Part | Share | Example funds (ISIN) |
|---|---|---|
| US large companies (S&P 500) | 48% | iShares Core S&P 500 UCITS ETF USD (Acc) IE00B5BMR087Vanguard S&P 500 UCITS ETF (USD) Distributing IE00B3XXRP09 |
| Developed markets outside the US (closest match) | 24% | iShares Core MSCI Europe UCITS ETF EUR (Acc) IE00B4K48X80iShares Core MSCI Japan IMI UCITS ETF IE00B4L5YX21 |
| US bond market (aggregate) (closest match) | 20% | iShares Core Global Aggregate Bond UCITS ETF EUR Hedged (Acc) IE00BDBRDM35iShares Core Global Aggregate Bond UCITS ETF USD (Dist) IE00B3F81409 |
| Real estate (REITs) | 8% | iShares US Property Yield UCITS ETF IE00B1FZSF77iShares Developed Markets Property Yield UCITS ETF IE00B1FZS350 |
The idea
Ferri wants a simple, cheap, tax-friendly portfolio built from four asset classes that each produce income and behave differently. REITs are added to the standard stock/bond/international core for extra diversification and inflation sensitivity. The 20% in bonds provides a ballast, and the stock split mirrors the global market in a simplified way.
How people buy it
Ferri says to choose index funds or ETFs for each class. Examples from third-party sites: Vanguard Total Stock Market, Vanguard Total International Stock, Vanguard REIT index and Vanguard Total Bond Market (or Schwab and iShares equivalents).
Rebalancing as published
No specific rebalancing rule found on Ferri's models page; Ferri's wider writing generally recommends periodic (about annual) rebalancing, but this was not verified here.
Variants
- Other risk levels: 30/24/6/40 (MyPlanIQ's more conservative weighting); Ferri's site offers four risk strategies per model.
- Six Core-4 models on Ferri's site (details not retrieved).
- Total Economy Core-4 and Global Markets Core-4 (Portfolio Charts).
- Original Core-4 using TIPS in the bond sleeve (ETF Portfolio Blueprint description of the Schwab Quadfecta).
Criticism
- Fixed 80% equity: the deepest real drawdown in Portfolio Charts' US data is 41% with a drawdown lasting up to 13 years.
- Weights are not uniquely defined in the literature; several versions circulate under the same name.
- No inflation hedge beyond REITs (no TIPS, gold or commodities in the Classic version).
- Home bias: 60% of the stock part is US, which is above US share of world markets in some eras, and below in others.
Through the eras
| Era | Dates | Total | Per year | Worst drop | S&P 500 |
|---|---|---|---|---|---|
| Roaring Twenties boom | 1926-07 – 1929-08 | +117.8 % | +27.9 % | −4.7 % | +153.7 % |
| Wall Street crash and Great Contraction | 1929-09 – 1932-07 | −68.3 % | −32.5 % | −74.9 % | −78.2 % |
| New Deal recovery | 1932-08 – 1937-02 | +208.5 % | +27.9 % | −25.5 % | +268.7 % |
| Recession within the Depression | 1937-03 – 1938-03 | −41.5 % | −39.1 % | −41.8 % | −49.5 % |
| Rearmament and World War II | 1938-04 – 1945-09 | +167.9 % | +14.0 % | −21.8 % | +205.8 % |
| Postwar expansion | 1945-10 – 1965-12 | +860.4 % | +11.8 % | −19.9 % | +1212.9 % |
| Golden age of the 1950s | 1950-01 – 1959-12 | +323.3 % | +15.5 % | −11.6 % | +438.8 % |
| Go-go years and nifty-fifty | 1966-01 – 1968-12 | +29.8 % | +9.1 % | −12.7 % | +34.0 % |
| The Great Inflation (stagflation) | 1969-01 – 1982-07 | +103.3 % | +5.4 % | −36.8 % | +84.6 % |
| 1973-74 oil shock and bear market | 1973-01 – 1974-12 | −32.4 % | −17.8 % | −36.8 % | −41.7 % |
| Second oil shock and the Volcker disinflation | 1979-01 – 1982-08 | +54.6 % | +12.6 % | −11.1 % | +59.2 % |
| Great bull market in stocks and bonds | 1982-08 – 1999-12 | +1211.7 % | +15.9 % | −23.8 % | +2060.4 % |
| Black Monday | 1987-08 – 1987-12 | −17.2 % | — | −23.8 % | −21.8 % |
| Savings-and-loan crisis and 1990 recession | 1990-07 – 1991-03 | +4.4 % | — | −13.7 % | +7.4 % |
| 1994 bond market massacre | 1994-02 – 1994-12 | −2.3 % | — | −4.7 % | −3.2 % |
| Asian and Russian financial crises | 1997-07 – 1998-10 | +13.2 % | +9.7 % | −12.0 % | +22.4 % |
| Dot-com bubble and crash | 2000-03 – 2002-10 | −22.2 % | −9.0 % | −28.1 % | −37.2 % |
| Recovery and housing boom | 2002-11 – 2007-09 | +107.0 % | +15.9 % | −5.2 % | +97.0 % |
| Global financial crisis | 2007-10 – 2009-03 | −38.4 % | −27.6 % | −43.4 % | −44.7 % |
| The decade after the crisis | 2009-04 – 2019-12 | +261.4 % | +12.7 % | −14.5 % | +411.2 % |
| Fourth-quarter 2018 sell-off | 2018-09 – 2018-12 | −10.5 % | — | −10.5 % | −14.4 % |
| Covid crash and stimulus boom | 2020-02 – 2021-12 | +35.1 % | +17.0 % | −16.5 % | +53.6 % |
| Inflation shock and rate hikes | 2022-01 – 2022-12 | −17.8 % | −17.8 % | −23.6 % | −19.9 % |
Calendar years
Any N-year period
| Any N-year period | Worst | 10 % worse than | Median | 10 % better than | Best |
|---|---|---|---|---|---|
| 1 y (1192) | −55.6 % | −8.8 % | +11.8 % | +29.0 % | +124.9 % |
| 3 y (1168) | −34.6 % | −2.2 % | +10.3 % | +19.1 % | +37.2 % |
| 5 y (1144) | −14.5 % | +2.0 % | +9.8 % | +16.4 % | +29.5 % |
| 10 y (1084) | −2.8 % | +4.5 % | +9.4 % | +14.5 % | +17.5 % |
| 15 y (1024) | +1.2 % | +6.2 % | +9.6 % | +13.9 % | +16.6 % |
| 20 y (964) | +2.9 % | +6.9 % | +10.0 % | +13.1 % | +15.2 % |
| 30 y (844) | +7.3 % | +8.6 % | +10.1 % | +11.7 % | +12.8 % |
How it behaved in history
- 1970-2025 (US investor). Deepest real drawdown 41%; the longest period below a previous high was about 13 years, consistent with 80% equity exposure through the 1970s inflation and the 2000s lost decade. portfoliocharts.com
- Other countries (1970-2025). For Spanish home investors the deepest real drawdown was 69% and for Japan the longest underwater spell was 20 years (Portfolio Charts country table). portfoliocharts.com
Published results (by others)
- Historical statistics for the Classic Core-4, US investor (1970-2025): average real return 6.8%, deepest real drawdown 41%, longest drawdown 13 years, volatility 13.2%, 30-year safe withdrawal rate 4.5% portfoliocharts.com
What we could not verify
- Whether Ferri's book 'All About Asset Allocation' states 48/24/8/20 exactly was not verified; the weights come from Portfolio Charts.
- The bond sleeve (intermediate Treasuries vs total bond vs TIPS) differs by source.
- Year of first Core-4 publication was not found.
- Rebalancing advice not found; core-4.com was not fetched.
- Bogleheads wiki returned 403.
Sources
- portfoliocharts.com
https://portfoliocharts.com/portfolios/core-four-portfolio/ - rickferri.com
https://rickferri.com/models/ - rickferri.com
https://rickferri.com/about-rick/ - www.myplaniq.com
https://www.myplaniq.com/invest/?p=648742 - www.lazyportfolioetf.com
https://www.lazyportfolioetf.com/allocation/rick-ferri-core-four/ - etfportfolioblueprint.com
https://etfportfolioblueprint.com/posts/the-charles-schwab-quadfecta-etf-portfolio
Calculated on historical data. Past results do not predict the future. Models before the 1990s use stand-ins for classes that had no index yet; fees, taxes and fund costs are not included. This is mathematics, not an investment recommendation.