
The Sandwich Portfolio is a 55/45 portfolio from Bob Clyatt. Here we’ll take a look at its components, performance, and the best ETF’s to use in its execution.
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Contents
What is the Sandwich Portfolio?
The Sandwich Portfolio is a lazy portfolio created by Bob Clyatt. He and the portfolio are famous online with the FIRE (Financial Independence, Retire Early) crowd, specifically with those looking to “semi-retire.” Clyatt authored the book Work Less, Live More: The Way to Semi-Retirement. Check out the website here.
The Sandwich Portfolio is as follows:
- 20% U.S. Large Cap Stocks
- 8% U.S. Small Cap Stocks
- 6% International Stocks
- 10% International Small Cap Stocks
- 6% Emerging Markets
- 30% Intermediate-Term Bonds
- 11% International Bonds
- 5% REITs
- 4% Cash

Sandwich Portfolio Performance Backtest vs. the S&P 500
Going back to 1999, here's the Sandwich Portfolio's performance vs. an S&P 500 index fund through 2019:

Compared to the S&P 500 index, the Sandwich Portfolio has delivered higher general and risk-adjusted returns (Sharpe), with a little more than half the volatility of the S&P 500, due to its healthy allocation to fixed income. This behavior is largely explained by its considerably smaller drawdowns through both the Dotcom Crash and the Subprime Mortgage Crisis:

I like the Sandwich Portfolio's allocation to fixed income, international stocks, international bonds, and emerging markets. I can also appreciate its Size tilt to small-caps, though that also happens to be where I specifically diverge. Small-caps have indeed beaten large-caps historically, but only because of small-cap value stocks. Small-cap growth stocks have been abysmal historically, seeming to not pay a risk premium, and are referred to as a “black hole” of investing. For that reason, I choose to avoid small-cap growth stocks altogether and tilt small-cap value.
A young investor with a long investing horizon can also likely afford to utilize a bond allocation with a longer average duration than that of intermediate-term bonds. Holding at least some allocation to long-term treasury bonds would probably be prudent.
Sandwich Portfolio ETF Pie for M1 Finance
M1 Finance is a great choice of broker to implement the Sandwich Portfolio because it makes regular rebalancing seamless and easy, has zero transaction fees, and incorporates dynamic rebalancing for new deposits. I wrote a comprehensive review of M1 Finance here.
Using almost entirely low-cost Vanguard funds, we can construct the Sandwich Portfolio like this:
- VOO – 20%
- VB – 8%
- VXUS – 6%
- VSS – 10%
- VWO – 6%
- VGIT – 30%
- BNDX – 11%
- VNQ – 5%
- BIL – 4%
You can add the Sandwich Portfolio pie to your portfolio on M1 Finance by clicking this link and then clicking “Save to my account.”
Don't want to do all this investing stuff yourself or feel overwhelmed? Check out my flat-fee-only fiduciary friends over at Advisor.com.
Disclosure: I am long VXUS.
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 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. 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.

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Don't want to do all this investing stuff yourself or feel overwhelmed? Check out my flat-fee-only fiduciary friends over at Advisor.com.
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