Performance & Risk Metrics (2016-2026)
| Metric | Ivy Portfolio | Larry Portfolio |
|---|---|---|
| CAGR (10-Year Annualized Return) | 8.8% | 9.1% |
| Max Drawdown | -14.2% | -24.5% |
| Sharpe Ratio (Risk-Adjusted Return) | 0.64 | 0.52 |
| Strategy Type | Tactical Asset Allocation (Moving Average) | Passive Portfolio (Factor Tilted) |
| Rebalancing Frequency | Monthly (on trend signals) | Annually (fixed target weights) |
Ivy Portfolio Philosophy
Meb Faber's Ivy Portfolio allocates equally across five asset classes (US equities, international equities, REITs, commodities, and bonds) and applies a 10-month simple moving average trend filter to each. When an asset falls below its SMA, the allocation moves to cash. This tactical overlay captures diversified returns while providing systematic crash protection.
Larry Portfolio Philosophy
Larry Swedroe's factor-tilted portfolio concentrates equity exposure in small-cap value stocks globally, while holding only safe short-term bonds. This aggressive factor bet aims for the highest expected equity returns by harvesting the Size and Value premiums, while keeping bond duration short to minimize interest rate risk.
Key Differences Explained
Tactical diversification vs concentrated factor exposure. The Ivy Portfolio spreads across 5 assets with trend protection, while the Larry Portfolio concentrates in small-cap value. The Ivy Portfolio has significantly lower drawdowns (-14.2% vs -24.5%) despite similar CAGR (8.8% vs 9.1%), giving it a much better Sharpe ratio (0.64 vs 0.52).
- Strategy Type: Ivy Portfolio is a tactical, actively-managed approach. Larry Portfolio is a passive, buy-and-hold approach.
- Return vs Risk: Ivy Portfolio delivered 8.8% CAGR with -14.2% max drawdown (Sharpe: 0.64). Larry Portfolio delivered 9.1% CAGR with -24.5% max drawdown (Sharpe: 0.52).
- Maintenance: Ivy Portfolio requires monthly signal monitoring. Larry Portfolio needs only annual rebalancing.
Side-by-Side Pros and Cons
Ivy Portfolio Strengths & Limits
- Broad 5-asset diversification across real and financial assets
- SMA trend filter provides systematic crash protection
- Moderate complexity — straightforward monthly check
- Can lag in strong trending bull markets due to diversification
- Commodities allocation can be a long-term drag
- Monthly trend signals can whipsaw in choppy markets
Larry Portfolio Strengths & Limits
- Highest expected returns from documented factor premiums
- Short-term bonds eliminate interest rate risk
- Academically grounded in Fama-French research
- Deep drawdowns from concentrated equity factor exposure
- Value factor can underperform growth for decades
- Requires strong conviction to hold through long underperformance
Which Strategy is Right For You?
Choose Ivy Portfolio if: You want diversified tactical exposure with crash protection. The Ivy Portfolio's broad asset coverage and trend filters provide a smoother investment experience.
Choose Larry Portfolio if: You have extreme conviction in small-cap value and a very long time horizon. The Larry Portfolio's concentrated factor bet is academically grounded but requires iron discipline.