In 2014, Tony Robbins introduced the world to the ‘All Weather’ portfolio as constructed by renowned hedge fund manager Ray Dalio. Also known as the ‘All Season’ strategy, Dalio proposed a mix of multiple asset classes that together can survive virtually any storm.

The ‘All Weather’ Portfolio Make-Up

The key components and weights of this strategy are the following:

The end result is a diverse group of inflationary and deflationary investments that that work to lower volatility and potentially enhance returns over the long-term.

Related: ETF Strategies for Long Term Portfolio Construction

Now at first glance, this asset allocation may seem somewhat recklessly overweight fixed-income. This is especially true when you consider that 40% of the portfolio is dedicated to long-term Treasuries with a duration of 20 years or more. That’s a whole lot of interest rate risk that would drag significantly on the portfolio in the event rates begin to meaningfully rise.

Yet on the flip side, it produces a sound counterbalance to the inflationary commodity, precious metals, and stock assets. In fact, the intermediate and long-term Treasury bond exposure is one of the reasons this portfolio model is having such a fantastic year.

Using exchange-traded funds as a proxy for the underlying structure of the All Weather portfolio is one of the best ways to examine its real-world performance.

The following list of funds can be used for investors who want to back-test or even directly invest in this strategy:

‘All Weather’ Portfolio ETFs

30% Vanguard Total Stock Market ETF (VTI) +7.21% YTD

40% iShares 20+ Year Treasury ETF (TLT) +15.96% YTD

15% iShares 7-10 Year Treasury ETF (IEF) +7.26% YTD

7.50% SPDR Gold Shares ETF (GLD) +25.71% YTD

7.50% PowerShares DB Commodity Index Tracking Fund (DBC) +9.81% YTD

Year-to-date total return through 9/26/16: +12.30%

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