• Skip to main content
  • Skip to secondary menu
  • Skip to primary sidebar
  • Skip to footer

Optimized Portfolio

Investing and Personal Finance

  • Start Here
  • Investing 101
    • Beginners Start Here – 10 Steps To Start Building Wealth
    • What Is the Stock Market? How It Works & How to Invest in It
    • How To Invest in an Index Fund – The Best Index Funds
    • Portfolio Asset Allocation by Age
    • How To Invest Your Emergency Fund
    • Portfolio Diversification – How To Diversify Your Portfolio
    • Dollar Cost Averaging vs. Lump Sum Investing (DCA vs. LSI)
    • How To Invest Your HSA (Health Savings Account)
    • Factor Investing and Factor ETFs – The Ultimate Guide
    • more…
  • Lazy Portfolios
    • All Weather Portfolio
    • Bogleheads 3 Fund Portfolio
    • HEDGEFUNDIE’s Excellent Adventure
    • Warren Buffett Portfolio
    • Golden Butterfly Portfolio
    • Paul Merriman Ultimate Buy and Hold Portfolio
    • Ben Felix Model Portfolio
    • Permanent Portfolio
    • David Swensen Portfolio
    • 60/40 Portfolio
    • more…
  • Funds
    • VOO vs. VTI – Vanguard S&P 500 or Total Stock Market ETF?
    • The 7 Best International ETFs
    • The 8 Best Small Cap ETFs (4 From Vanguard)
    • The 5 Best REIT ETFs
    • The 5 Best EV ETFs – Electric Vehicles ETFs
    • VIG vs. VYM – Comparing Vanguard’s 2 Popular Dividend ETF’s
    • The Best Vanguard Dividend Funds – 4 Popular ETFs
    • The 5 Best Tech ETFs
    • The 7 Best Small Cap Value ETFs
    • The 6 Best ETFs for Taxable Accounts
    • The 5 Best Emerging Markets ETFs (1 From Vanguard) for 2023
    • more…
  • Leverage
    • What Is a Leveraged ETF and How Do They Work?
    • How To Beat the Market Using Leverage and Index Investing
    • The 9 Best Leveraged ETFs
    • Hedgefundie’s Excellent Adventure
    • Leveraged All Weather Portfolio
    • Leveraged Permanent Portfolio
    • Leveraged Golden Butterfly Portfolio
    • NTSX – Review and Summary
    • TQQQ – Is It A Good Investment?
    • PSLDX – A Review
    • SWAN – A Review
    • RPAR Risk Parity ETF Review
    • more…
  • Dividends
    • The Best M1 Finance Dividend Pie
    • The 11 Best Dividend ETFs
    • The Best Vanguard Dividend Funds – 4 Popular ETFs
    • VIG vs. VYM – Comparing Vanguard’s 2 Popular Dividend ETF’s
    • 8 Reasons Why I’m Not a Dividend Income Investor
    • QYLD – A Harsh Review
    • more…
  • Brokers
    • The 5 Best Stock Brokers
    • The 4 Best Investing Apps
    • M1 Finance Review
    • Brokers with the Lowest Margin Rates
    • M1 Finance vs. Fidelity
    • M1 Finance vs. Vanguard
    • Webull vs. Robinhood
    • Stash vs. Robinhood
    • M1 Borrow Review (How M1’s Margin Loan Works)
    • more…
  • Retirement
    • The 10 Best ETFs for Retirement Portfolios in 2023
    • The 4% Rule for Retirement Withdrawal Rate – A Revisitation
    • Sequence of Return Risk in Retirement Explained
    • Traditional IRA Explained
    • Roth IRA Explained
    • 401k vs. Roth IRA
    • Roth IRA vs. Traditional IRA
    • Backdoor Roth IRA Explained
    • more…
  • My Toolbox

William Bernstein No Brainer Portfolio Review and ETFs To Use (2025)

Last Updated: July 19, 2024 No Comments – 5 min. read

Financially reviewed by Patrick Flood, CFA.

The William Bernstein No Brainer Portfolio may indeed be a no brainer. Here we'll check out its components, historical performance, and the best ETFs to use for it in 2025.

Interested in more Lazy Portfolios? See the full list here.

Disclosure:  Some of the links on this page are referral links. At no additional cost to you, if you choose to make a purchase or sign up for a service after clicking through those links, I may receive a small commission. This allows me to continue producing high-quality content on this site and pays for the occasional cup of coffee. I have first-hand experience with every product or service I recommend, and I recommend them because I genuinely believe they are useful, not because of the commission I may get. Read more here.

Contents

  • Video
  • Who Is William Bernstein?
  • What Is the William Bernstein No Brainer Portfolio?
  • William Bernstein No Brainer Portfolio Performance Backtest and Review
  • William Bernstein No Brainer Portfolio ETF Pie for M1 Finance

Video

Prefer video? Watch it here:

Who Is William Bernstein?

William (Bill) Bernstein is a retired neurologist, financial theorist, and prolific investing author. Like the other voices of wisdom in the investing world, William Bernstein maintains that index investing is superior to stock picking, and that asset allocation is far more important than the selection of those assets or timing the buying and selling thereof. He delineates the details and reasoning behind this approach in his first book, The Intelligent Asset Allocator.

m1 money moves

Bernstein is one of the most prolific investing authors out there. Math/theory nerds like me and armchair investors alike will enjoy and get something from all of his investing-related books:

  • The Intelligent Asset Allocator
  • If You Can: How Millennials Can Get Rich Slowly
  • The Four Pillars of Investing: Lessons for Building a Winning Portfolio
  • The Investor's Manifesto: Preparing for Prosperity, Armageddon, and Everything in Between
  • Rational Expectations: Asset Allocation for Investing Adults (more advanced; beginners should probably skip this one)

What Is the William Bernstein No Brainer Portfolio?

As the name suggests, the No Brainer Portfolio was created by William Bernstein. It is considered a “lazy portfolio,” being easy to implement and manage. I've also seen it referred to as the “Simpleton's Portfolio,” which makes sense, as this is arguably the simplest of all the portfolios Bernstein has created; no special asset classes here, and Bernstein admits he is an “asset class junkie.” He also designed the Coward's Portfolio.

The William Bernstein No Brainer portfolio is a diversified blend of 4 equally-weighted asset classes:

  • 25% US Large Cap Blend
  • 25% US Small Cap Blend
  • 25% International Stocks
  • 25% Short-Term Bonds
william bernstein no brainer portfolio

William Bernstein No Brainer Portfolio Performance Backtest and Review

Going back to 1986, here's a comparison of the William Bernstein No Brainer Portfolio and the S&P 500 through 2022:

no brainer portfolio performance
Source: PortfolioVisualizer.com

Well, had we invested in the No Brainer Portfolio during this time period, we would have ended up with an even lower risk-adjusted return (Sharpe) than the plain ol' S&P 500, so the diversification didn't really do much for us. What happened? Let's talk about the portfolio's components to figure that out.

So we're basically taking a barbell on stocks and excluding mid-caps. I don't have a problem with that; just something to note. I like that we're overweighting small caps, but if we're doing that, Bernstein would also know we should probably overweight/tilt small cap value, so I'd rather see small cap value stocks for that piece, which would not be an insignificant switch because they comprise 1/4 of the portfolio. Small cap growth stocks have been shown to not pay a risk premium like small-cap value stocks. Here's a longer explanation on why we'd expect smaller stocks to beat larger stocks and why we'd expect Value stocks to beat Growth stocks.

Also note that global market cap weights put the U.S. at around 55% and ex-US at around 45%, so we're overweighting the U.S. stock market, which for U.S. investors is called home country bias. Most people do this anyway. Again, I don't have a big problem with that, but it's just something to note. I'd prefer to see a tilt to Emerging Markets, but I think Bernstein was purposefully trying to keep it simple and have a small number of slices. I can understand that. Simplicity is underrated.

spend retirement with more

The confusing piece – and what dragged down the portfolio's performance – is the short-term bonds. Just like with his Coward's Portfolio, Bernstein seems to forget that more volatile assets make better diversifiers. When the portfolio is not bond-heavy (here bonds only get 25%), it doesn't make much sense to use short-term bonds. We want the greater volatility of longer-duration bonds because it is better able to counteract the downward movement of the 75% stocks.

This is where I've always fundamentally disagreed with Bernstein. He argues for portfolio efficiency and diversification but then seems to stop when it comes to the fixed income allocation. He subscribes to that unfortunately-widespread mental accounting idea of “taking risk on the equities side,” meaning he views the short term bonds myopically as a safe haven for cash, which they are.

But this is like covering one eye during a stock market crash, looking at the short-term bonds, and saying “well at least that piece didn't lose money,” which is demonstrably irrational. One should always attempt to optimize the portfolio as a whole, not each asset in isolation. The ironic thing is that Bernstein should know this better than anyone, as he's written several books on asset allocation.

Moreover, bond duration should be matched to the investor's time horizon. The investor using the No Brainer Portfolio clearly doesn't have a 1-2 year horizon, because it's still 75% stocks.

In the interest of full disclosure, I really enjoy Bernstein's writing style and I've gotten great entertainment from his books, but I fundamentally disagree with him on several other points as well. One, he has a weird aversion to ETFs and prefers mutual funds. I assume he just likes to stick with familiarity since he's older, because his reasons cited for this irrational preference hinge on commissions and spreads, which are immaterial concerns in my opinion, particularly with highly liquid funds that we'd be using here anyway.

Secondly, he advocates for dollar cost averaging and says it “boosts long-term returns.” We know this is demonstrably untrue over the long term. Similarly, he suggests market timing to buy more stocks during downturns. This is easier said than done, but more importantly, it requires holding cash as “dry powder” on the sidelines, which we also know is suboptimal on average. In fairness, the robust research on these last points came after most of Bernstein's writings.

So anyway, back to the bonds. Here's how things would have worked out using long term treasury bonds, denoted by “LTT” in the name:

no brainer portfolio long term bonds
Source: PortfolioVisualizer.com

Much better. Note the lower volatility, smaller max drawdown, and greater general and risk-adjusted returns. This is because in using long bonds, we're giving the bonds piece more room to do its job of mitigating stock downturns.

William Bernstein No Brainer Portfolio ETF Pie for M1 Finance

M1 Finance is a great choice of broker to implement the No Brainer Portfolio because it makes regular rebalancing seamless and easy with one click, has zero transaction fees, and incorporates dynamic rebalancing for new deposits. I wrote a comprehensive review of M1 Finance here.

We can construct the No Brainer Portfolio pie with the following ETFs:

  • VOO – 25%
  • SPSM – 25%
  • VXUS – 25%
  • SCHO – 25%

You can add the No Brainer Portfolio pie to your portfolio on M1 Finance by clicking this link and then clicking “Add to Portfolio.”

Canadians can find the above ETFs on Questrade or Interactive Brokers. Investors outside North America can use Interactive Brokers.

If you're like me, though, you might want to use long term treasuries like I illustrated above. That pie would look like this:

  • VOO – 25%
  • SPSM – 25%
  • VXUS – 25%
  • VGLT – 25%

Here's an M1 link for that one.


Are you nearing or in retirement? Use my link here to get a free holistic financial plan and to take advantage of 25% exclusive savings on financial planning and wealth management services from fiduciary advisors at Retirable to manage your savings, spend smarter, and navigate key decisions.

safe to spend

What do you think of the Bernstein No Brainer Portfolio? Let me know in the comments.


Disclosures: I am long VOO in my own portfolio.

Interested in more Lazy Portfolios? See the full list here.

Disclaimer:  While I love diving into investing-related data and playing around with backtests, this is not financial advice, investing advice, or tax advice. The information on this website is for informational, educational, and entertainment purposes only. Investment products discussed (ETFs, mutual funds, etc.) are for illustrative purposes only. It is not a research report. It is not a recommendation to buy, sell, or otherwise transact in any of the products mentioned. I always attempt to ensure the accuracy of information presented but that accuracy cannot be guaranteed. Do your own due diligence. I mention M1 Finance a lot around here. M1 does not provide investment advice, and this is not an offer or solicitation of an offer, or advice to buy or sell any security, and you are encouraged to consult your personal investment, legal, and tax advisors. Hypothetical examples used, such as historical backtests, do not reflect any specific investments, are for illustrative purposes only, and should not be considered an offer to buy or sell any products. All investing involves risk, including the risk of losing the money you invest. Past performance does not guarantee future results. Opinions are my own and do not represent those of other parties mentioned. Read my lengthier disclaimer here.

m1


Are you nearing or in retirement? Use my link here to get a free holistic financial plan and to take advantage of 25% exclusive savings on financial planning and wealth management services from fiduciary advisors at Retirable to manage your savings, spend smarter, and navigate key decisions.

retirement peace of mind

Related Posts

  • M1 Earn High Yield Cash Account Review – 4% APY (2025)
  • “Should I Invest in International Stocks?” Yes. Here’s Why.
  • RSSY ETF Review – Return Stacked® U.S. Stocks & Futures Yield ETF
  • The 5 Best Short Term Bond ETFs (3 From Vanguard)
  • 2 Best Emerging Markets Value ETFs for 2025 (Not AVEM or AVES)

About John Williamson, APMA®

Analytical data nerd, investing enthusiast, fintech consultant, Boglehead, and Oxford comma advocate. I'm not a big fan of social media, but you can find me on LinkedIn and Reddit.

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Primary Sidebar

  • Facebook
  • Instagram
  • Reddit
  • Twitter
  • YouTube
  • Patreon

Join 5,372 other investors

Take control of your financial future by subscribing to receive exclusive emails with expert tips, news, and notifications of new posts and important updates.

Don't worry, I hate spam too. No ads.

John Williamson, APMA®

Analytical data nerd, investing enthusiast, fintech consultant, Boglehead, and Oxford comma advocate. I'm not a big fan of social media, but you can find me on LinkedIn and Reddit. Read More…

Most Popular

Ray Dalio All Weather Portfolio Review, ETFs, & Leverage (2025)

HEDGEFUNDIE’s Excellent Adventure (UPRO/TMF) – A Summary

Golden Butterfly Portfolio Review and M1 Finance ETF Pie

David Swensen Portfolio (Yale Model) Review and ETFs To Use

55 Lazy Portfolios and Their ETF Pies for M1 Finance (2025)

VIG vs. VYM – Vanguard’s 2 Popular Dividend ETFs (Review)

Warren Buffett ETF Portfolio (90/10) Review and ETFs (2025)

Bogleheads 3 Fund Portfolio Review and Vanguard ETFs (2025)

Paul Merriman Ultimate Buy and Hold Portfolio Review & ETFs (2025)

The Best M1 Finance Dividend Pie for FIRE & Income Investors

m1 sidebar

retirable

Portfolio Asset Allocation by Age – Beginners To Retirees

The 7 Best Small Cap ETFs (3 From Vanguard) for 2025

9 Best International ETFs To Buy (6 From Vanguard) in 2025

The 3 Best Inverse ETFs to Short the S&P 500 Index in 2025

Ben Felix Model Portfolio (Rational Reminder, PWL) ETFs & Review

Factor Investing and Factor ETFs – The Ultimate Guide

NTSX ETF Review – WisdomTree U.S. Efficient Core ETF (90/60)

The Ginger Ale Portfolio (My Own Portfolio) and M1 ETF Pie

TQQQ – Is It A Good Investment for a Long Term Hold Strategy?

QYLD – Avoid This ETF as a Long-Term Investment (A Review)

The 9 Best T Bill ETFs (Treasury Bills) To Park Cash in 2025

JEPI ETF Review – JPMorgan Equity Premium Income ETF

SPAXX vs. FZFXX, FDIC, FCASH, FDRXX – Fidelity Core Position

Recent Posts

M1 Earn High Yield Cash Account Review – 4% APY (2025)

RSBY ETF Review – Return Stacked® U.S. Bonds & Futures Yield ETF

1 ETF for Life to Get Rich? It’s Not One You’d Guess…

How to Get 35% off a New Tesla Model Y (1.99% APR Financing Promo)

M1 Finance New Dividend Reinvestment Features Are Here! (Sneak Peek)

RSSY ETF Review – Return Stacked® U.S. Stocks & Futures Yield ETF

RSBT ETF Review – Return Stacked® Bonds & Managed Futures ETF

RSST ETF Review – Return Stacked® US Stocks & Managed Futures ETF

CAOS ETF Review – Alpha Architect Tail Risk ETF

How to Get 33% off a New Tesla Model Y (0.99% APR Promo)

CALF ETF Review – Pacer U.S. Small Cap Cash Cows 100 ETF

Is THIS the Best Portfolio?

AVMA ETF Review – Avantis Moderate Allocation ETF (60/40 + Factors)

COWZ ETF Review – Pacer U.S. Cash Cows 100 ETF

BOXX ETF Review – Alpha Architect 1-3 Month Box ETF

View All...

Footer

  • Facebook
  • Instagram
  • Reddit
  • Twitter
  • YouTube
  • Patreon

Amazon Affiliate Disclosure

OptimizedPortfolio.com is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.

Email Newsletter

Sign up to receive email updates when a new post is published.

Don't worry, I hate spam too. No ads.

About - My Toolbox - Privacy - Terms - Contact


Copyright © 2025 OptimizedPortfolio.com

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Ok, Got ItReject Read More
Privacy & Cookies Policy

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Non-necessary
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
SAVE & ACCEPT