USA - Portrait - Mohamed El-Erian

Pimco’s “New Normal” Revisited, Again.

I’ve been following Pimco’s “New Normal” meme for a while.

Basically, sometime ago, Mohammed El-Erian gave an interview spelling out how he thought a portfolio should be allocated given their take on things in this era of the “New Normal”.

Below is the initial mix & securities I used to emulate the allocation he suggested & re-balanced quarterly:

  • 15% US Large EQ (Vanguard Total Stock Index)
  • 15% Developed Non-US EQ (Vanguard FTSE All World)
  • 18% Emerging Market EQ (Vanguard MSCI Emerging Market)
  • 03% US Investment Grade Corporates (iShares iBoxx $ Invest Grade Corp Bond) –
  • 03% US Hi-Yield (iShares iBoxx $ High Yield Corporate)
  • 09% Non US Bonds (SPDR Barclays Capital Intl Treasuries)
  • 05% US TIPS (iShares Barclays TIPS Bond)
  • 06% US Real Estate (Vanguard REIT Index)
  • 11% Commodities (PowerShares DB Commodity Index)
  • 05% Infrastructure (iShares S&P Global Infrastructure)
  • 10% Cash (1% yield assumption)

And, here’s the latest reporting of how that portfolio is doing vs. the S&P 500.

Pimco New Normal Portfolio thru 4-30-2012


Disclosure: This is not investment advice or an endorsement of any of the products used for this post.




2 thoughts on “Pimco’s “New Normal” Revisited, Again.

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