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Four Corners

Four Corners Portfolio (US large/small x blend/value)

Popularised as the '4 Fund Portfolio' by Paul Merriman; the 'four corners' label is used on the Bogleheads forum; based on Fama-French size and value research · not established (the Merriman 4-fund form came after his 10-fund Ultimate Buy and Hold; Bogleheads 'four corners' thread compares data to 2011)

Live account on this site. This portfolio is also tracked here with a virtual $100,000 since 21.10.2026. Live account on this site →

Where it stands today

Data through 2026-09. Updated every month.

Since January+17.0 %
Last 12 months+22.2 %
Last 5 years, per year+12.4 %
Now below the peak−3.7 %
Place by 12 months1 / 60

Our calculation, 1926-07 – 2026-09

Per year12.6 %
Real (after inflation)9.3 %
Volatility23.3 %
Worst drop−86.7 %
Worst year−49.9 % (1931)
Best year109.1 %
Worst 12 months−69.0 %
Positive years72 %

Growth of $10,000

$2,896$40,097$555,122$7,685,451$106,402,076$1,473,095,2191930194019501960197019801990200020102020
Four Corners: $1,419,036,097S&P 500: $196,488,890

Where it came from

The four corners are the four extremes of the US equity style box when the growth side is dropped: large blend, large value, small blend and small value. A Bogleheads forum discussion describes the four corners as an equal split among large cap, large value, small cap and small value and links it to the earlier Coffeehouse portfolio of Bill Schultheis. That thread compares it with total market plus small-value for 1972-2011, so it dates from about 2012 or later (I could not open the thread; this is from a search summary).

The best documented form with a named author is Paul Merriman's '4 Fund Portfolio' (a retired fund manager; he started a financial education foundation in 2013, according to a third-party profile). It holds four US index funds: S&P 500 (large blend), large-cap value, small-cap blend and small-cap value. The Foundation's site lists these four categories; the equal 25% weights are stated by an independent blogger (Early Retirement Now) and by Merriman's own description of the 'Worldwide 4 Fund' variant, which uses 25% in each of four slots.

Merriman says he did not invent the combination and credits Fama and French's research on size and value (from an excerpt of a MarketWatch column reprinted on his site; I could not open the page itself). The logic: large and small stocks, and growth and value stocks, do not move together, so holding all four may help in some markets.

Merriman's own claim: from 1928 through 2020 the 4-fund combination earned 11.7% a year on average versus 10.00% for the S&P 500. An independent review (Early Retirement Now, Dec 2024) reproduced the 11.7% vs 10.0% for 1928-2021 but showed that the edge is concentrated before the 1980s and is not statistically reliable, and that ETF-based results since 2000 trail the S&P 500 at all horizons from one to twenty years.

There is no bond or international sleeve in the portfolio as published; it is 100% US equity. Merriman publishes separate combinations with bonds (his 60/40 comparisons) and a Worldwide version; those are different models. The related models in this encyclopedia are the Merriman 2-fund model and the Merriman Ultimate Buy and Hold.

What is in it

Large blend (S&P 500)25%
Large value25%
Small blend25%
Small value25%

Source of the shares: Early Retirement Now, 'Small-cap value stocks: diversification or diworsification?' (Dec 2024); Merriman Foundation pages list the four categories — earlyretirementnow.com. Four equal 25% slices: S&P 500, large-cap value, small-cap blend, small-cap value (ERN proxied them with iShares IVV, IWD, IWM, IWN). Merriman's own site (the-four-fund-portfolio-yields-higher-returns) lists the same four categories without the percentages in the text I could read.

How we model it

US large companies (S&P 500)25%
US large value stocks25%
US small companies25%
US small value stocks25%

Direct match: large blend = us_large (CRSP total market here, S&P 500 after 1988), large value = us_large_value, small blend = us_small, small value = us_small_value. Our us_small is the average of three small-cap groups (includes micro caps) and the value series are Fama-French portfolios, which are more extreme than the index funds an investor can buy (see assets_meta). No bond or cash sleeve is added because none is published.

For a euro investor

The same portfolio bought with euros, without currency hedging: monthly returns converted at the end-of-month rate (German mark before 1999), inflation of the euro area. History in euros from 1953-10 to 2026-09.

Per year in euros12.3 %
After euro inflation9.3 %
Worst drop in euros−62.1 %
Worst year in euros−33.7 % (1973)
Safe withdrawal, 30 years, dollars3.64 % (1929-09)
Safe withdrawal, 30 years, euros3.35 % (1968-12)

The largest first-year withdrawal, then growing with inflation, that lasted 30 years from every monthly start. Test withdrawals for this portfolio →

How to build it with European funds

Examples of UCITS funds sold in the EU for each part of the portfolio. They track similar markets, not exactly the indices of our calculation.

PartShareExample funds (ISIN)
US large companies (S&P 500)25%iShares Core S&P 500 UCITS ETF USD (Acc) IE00B5BMR087
Vanguard S&P 500 UCITS ETF (USD) Distributing IE00B3XXRP09
US large value stocks25%iShares Edge MSCI USA Value Factor UCITS ETF IE00BD1F4M44
US small companies25%SPDR Russell 2000 U.S. Small Cap UCITS ETF IE00BJ38QD84
iShares MSCI USA Small Cap ESG Enhanced CTB UCITS ETF USD (Acc) IE00B3VWM098
US small value stocks25%SPDR MSCI USA Small Cap Value Weighted UCITS ETF IE00BSPLC413

These are examples, not recommendations. Check the fund's key information document, costs and taxes with your broker before buying. Names and ISINs checked on justETF on 4 November 2026; Udak receives nothing from these funds.

The idea

Capture the size and value premia found by Fama and French without picking between them, by holding all four corners in equal parts. Merriman's argument is that a tilt to small and value stocks has paid more over the very long run than a plain S&P 500.

How people buy it

Four index funds or ETFs, for example (ERN's proxies) IVV, IWD, IWM, IWN; Merriman's article names fund categories rather than products in the pages I could read.

Rebalancing as published

Not stated in the pages I could read. Equal weights are implied (25% each); annual rebalancing is used in the ERN replication only as far as I could see (not confirmed).

Variants

Criticism

Through the eras

EraDatesTotalPer yearWorst dropS&P 500
Roaring Twenties boom1926-07 – 1929-08+117.3 %+27.8 %−9.6 %+153.7 %
Wall Street crash and Great Contraction1929-09 – 1932-07−79.0 %−41.5 %−86.7 %−78.2 %
New Deal recovery1932-08 – 1937-02+471.4 %+46.3 %−46.5 %+268.7 %
Recession within the Depression1937-03 – 1938-03−61.3 %−58.4 %−62.2 %−49.5 %
Rearmament and World War II1938-04 – 1945-09+427.0 %+24.8 %−32.3 %+205.8 %
Postwar expansion1945-10 – 1965-12+1697.2 %+15.3 %−29.9 %+1212.9 %
Golden age of the 1950s1950-01 – 1959-12+522.2 %+20.1 %−19.9 %+438.8 %
Go-go years and nifty-fifty1966-01 – 1968-12+83.0 %+22.3 %−18.6 %+34.0 %
The Great Inflation (stagflation)1969-01 – 1982-07+203.7 %+8.5 %−40.9 %+84.6 %
1973-74 oil shock and bear market1973-01 – 1974-12−40.4 %−22.8 %−40.4 %−41.7 %
Second oil shock and the Volcker disinflation1979-01 – 1982-08+89.1 %+19.0 %−16.0 %+59.2 %
Great bull market in stocks and bonds1982-08 – 1999-12+1939.2 %+18.9 %−30.2 %+2060.4 %
Black Monday1987-08 – 1987-12−23.8 %—−30.2 %−21.8 %
Savings-and-loan crisis and 1990 recession1990-07 – 1991-03+3.8 %—−22.0 %+7.4 %
1994 bond market massacre1994-02 – 1994-12−5.3 %—−7.7 %−3.2 %
Asian and Russian financial crises1997-07 – 1998-10+13.4 %+9.9 %−21.9 %+22.4 %
Dot-com bubble and crash2000-03 – 2002-10−11.6 %−4.5 %−27.4 %−37.2 %
Recovery and housing boom2002-11 – 2007-09+129.9 %+18.5 %−11.0 %+97.0 %
Global financial crisis2007-10 – 2009-03−49.6 %−36.7 %−55.1 %−44.7 %
The decade after the crisis2009-04 – 2019-12+382.3 %+15.8 %−23.3 %+411.2 %
Fourth-quarter 2018 sell-off2018-09 – 2018-12−19.0 %—−19.0 %−14.4 %
Covid crash and stimulus boom2020-02 – 2021-12+53.8 %+25.2 %−29.7 %+53.6 %
Inflation shock and rate hikes2022-01 – 2022-12−9.7 %−9.7 %−17.5 %−19.9 %

Calendar years

-50%109%1927: +33.0%1928: +38.7%1929: -23.4%1930: -38.9%19301931: -49.9%1932: -1.5%1933: +109.1%1934: +4.3%1935: +51.8%1936: +53.8%1937: -44.1%1938: +29.7%1939: -3.2%1940: -7.3%19401941: -7.2%1942: +28.4%1943: +58.6%1944: +38.6%1945: +56.2%1946: -7.9%1947: +4.1%1948: -0.5%1949: +20.6%1950: +44.0%19501951: +15.1%1952: +12.5%1953: -3.7%1954: +62.1%1955: +24.6%1956: +6.2%1957: -16.2%1958: +64.3%1959: +17.2%1960: -4.1%19601961: +29.1%1962: -9.3%1963: +24.8%1964: +18.7%1965: +28.7%1966: -8.3%1967: +51.5%1968: +31.7%1969: -19.2%1970: +2.4%19701971: +16.4%1972: +11.5%1973: -21.5%1974: -24.0%1975: +53.0%1976: +44.9%1977: +10.2%1978: +13.6%1979: +31.6%1980: +26.7%19801981: +8.5%1982: +29.8%1983: +33.5%1984: +6.4%1985: +32.1%1986: +15.5%1987: -3.7%1988: +24.4%1989: +23.3%1990: -16.0%19901991: +37.5%1992: +22.5%1993: +19.0%1994: -2.3%1995: +36.5%1996: +21.9%1997: +33.4%1998: +9.0%1999: +16.5%2000: +11.9%20002001: +6.1%2002: -19.5%2003: +44.8%2004: +17.3%2005: +8.9%2006: +19.0%2007: -3.2%2008: -35.9%2009: +28.1%2010: +19.9%20102011: -5.9%2012: +21.1%2013: +40.3%2014: +7.7%2015: -5.6%2016: +24.6%2017: +16.3%2018: -10.6%2019: +24.1%2020: +11.8%20202021: +31.6%2022: -9.7%2023: +17.5%2024: +16.5%2025: +18.1%

Any N-year period

Any N-year periodWorst10 % worse thanMedian10 % better thanBest
1 y (1192)−69.0 %−13.1 %+15.5 %+43.7 %+298.4 %
3 y (1168)−47.0 %−2.8 %+14.2 %+26.3 %+66.1 %
5 y (1144)−25.5 %+0.2 %+13.8 %+22.9 %+51.6 %
10 y (1084)−4.8 %+6.2 %+13.9 %+19.7 %+24.9 %
15 y (1024)+0.7 %+8.1 %+13.8 %+18.1 %+22.7 %
20 y (964)+5.3 %+9.2 %+13.9 %+17.9 %+20.5 %
30 y (844)+9.7 %+11.1 %+14.1 %+16.5 %+18.5 %

How it behaved in history

Published results (by others)

What we could not verify

Sources

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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.