I currently have a portfolio of actively managed funds and I am considering going to an all ETF portfolio. In doing so, I am developing my own "lazy" portfolio (I posted my first attempt on the Vanguard Diehards forum as the Catnapper portfolio). After incorporating their advice and making some other tweaks, here is my second attempt.

This portfolio would be in the high six figures and, barring the unexpected, would not require principal distributions. About a third would be in non-taxable accounts.

30%     VTI     Vanguard Total Stock Market
07%     VB     Vanguard Small Cap
15%     VEU   Vanguard FTSE All-World ex-US
03%     GWX  SPDR S&P International Small Cap
05%     VNQ   Vanguard REIT Index
05%     WPS   iShares S&P World ex-US Property Index
15%     BND    Vanguard Total Bond Market
05%     IPE     SPDR Barclays Capital TIPS   
    or     WIP    SPDR DB International Government Inflation-Protected Bond
05%     BWX   SPDR Lehman Intl Treasury Bond
05%     BSV    Vanguard Short-Term Bond
05%     Cash

Is an all ETF portfolio a good idea?

Is this allocation reasonable  for long-term holding?

Would you recommend  IPE or WIP?

 Any suggestions or thoughts would be appreciated.

As for you allocation, that is completely up to you and your time frame & risk levels. As an average investor an all ETF portfolio makes sense. Low expenses, great diversification. I have a primarily all indexed portfolio except for an actively managed micro-cap fund & individual equities. Some sectors can benefit from having active management such as small cap, internationals. I think with a long time horizon you will get respectable performance and save your self the aggravation of having to closely monitor an active fund whether the manager has changed or having a string of bad luck picking the right stocks. You'll be the last to know in these events when there are internal fund issues. Good luck!

In my opinion VB and BSV are not really necessary.  I would add a commodity index such as RJI or DJP at 3-5%

A few suggestions,

 I'd consider replacing vb with vxf.  That'll give you mids and smalls and a lower expense ratio.  I'd also suggest replacing gwx with scz or mdd for a lower expense ratio.

As for allocation, obviously that depends on your other assets.  VNQ makes alot of sense if you rent, or don't hold a significant portion of your wealth in your home.  On the other hand, if you own a big house and a couple of vacation condos, you’re already heavily invested in real-estate, and you probably don't need more exposure to that market.

 Hope that helps

PowerShares has recently issued three new ETFs which are designed as global investments comprised of other ETFs, both equity and income. You may want to look at these as models for what you are thinking about.

 

See PCA, PAO and PTO at the PowerShares website. 

Thanks for the suggestions.

 

Take IPE over WIP.  Inflation-Protected Bonds are supposed to protect you against the threat of inflation, right?  Unless you have large assets in foreign currency, why would you need protection against foreign inflation?  Even if you did hold large amounts of foreign currency, you probably don't hold all the different currencies in the same ratio as WIP.  So why purchase insurance on something you don't own?  The other problem with WIP, and BWX for that matter, is price.  How can you justify paying out such a large expense ratio for bonds?  It throws the risk/reward ratio way out of whack IMO.  If you think you need more international exposure, you could put more in VEU.  If you think you need more bond diversification, you could add long-term bonds to compliment short-term, corporate to compliment government, or just put more in BND.

1. Open an account at a brokerage with free trades: WellsTrade of BofA.
2. Rebalancing: Buy when ETF is not in favor and is trading at discount to NAV. Sell when the ETF is in favor and trading at premium to NAV. Slight premium/discount always exist.
3. Taxable account: Hold TFI/MUB for municipal bonds. And stick to broad market ETFs: VTI, VEU, VWO etc.
4. IRA/401k: Hold dividend, small-cap and value based funds. VNQ, WPS and taxable bonds/TIPS.

In rare cases, certain mutual funds are cheaper or better than ETFs, such as VWLTX for muni bonds.

I think that an all ETF portfolio is a great idea.  Read this article from Nasdaq on how you can make an ETF portfolio profitable.

http://www.nasdaq.com/investing/3-steps-profitable-etf-portfolio.stm 

Also, you can check out this site in order to do more research on those funds.  I think this is one of the most comprehensive sites out there for ETFs. http://www.etfmarketpro.com/etf-directory/

Good Luck! 

I have an all ETF portfolio and I have only three CWI, PWJ and TLO. VB is worthless when you have VTI (which emulates the market the goal is to beat it) VEU (like my CWI) is a must own but no need for GWX either (especially since S&P is mostly financial) not too crazy about REITS until 2010 and IPE is a good safe bet here for they adjust for inflation BND is ok as well but lose everything else.

Someone on hre mentioned the powershares line of adjusted ETFs which has my interest PCA I think is the tame one 60/40 while PAO is the voliatle one 90/10 split. There is one at 75/25 that may suit your needs.