On this page
Six exchange-traded funds cover what an ordinary household can buy in one brokerage account: US stocks, intermediate Treasuries, long Treasuries, listed commercial real estate, gold and cash. Run from February 2006 and again from January 2010 to September 2026, dividends reinvested, before costs and taxes, four of them earned a place in a portfolio and two did not, from either start.
| asset | from 2006: a year, vol, worst fall | from 2010: a year, vol, worst fall | 2022 |
|---|---|---|---|
| US stocks (SPY) | 11.1%, 19%, −55% | 14.2%, 17%, −34% | −18% |
| Gold (GLD) | 10.0%, 18%, −46% | 8.2%, 17%, −46% | −1% |
| Treasuries 7-10y (IEF) | 3.1%, 7%, −24% | 2.5%, 7%, −24% | −15% |
| Long Treasuries (TLT) | 2.7%, 15%, −48% | 2.4%, 15%, −48% | −31% |
| Listed commercial real estate (VNQ) | 6.1%, 29%, −73% | 8.6%, 20%, −42% | −26% |
| Cash (T-bills) | 1.6%, 1%, −1% | 1.3%, 0%, 0% | +1% |
Long Treasuries: a bond that swings like stocks
The 20-year-plus Treasury fund returned 2.7% a year from 2006 and 2.4% from 2010, less than the intermediate fund from either start, with twice the swings. Its worst fall, from the 2020 peak to the 2023 trough, was 48%, close to what stocks lost in 2008. In 2022 it lost 31% in one calendar year.
The case for holding it was 2008, when it rose 34% while stocks fell 37%. That year is the whole argument, and it was available at half the price: intermediate Treasuries rose 18% in 2008 at a third of the long fund’s volatility. Swapping the long fund for the intermediate one inside 60/40 changed the return from 8.2% to 8.3% a year from 2006 and cost 6.7 points in 2022: −23.3% against −16.6%.
Long duration is a bet that rates fall. From 2006 to the end of 2020 they did, and the fund returned 7.2% a year. From 2021 it lost 8% a year, and the full-window result is 2.7%.
Listed real estate: a worse equity
The real estate fund holds listed landlords: office, retail, warehouses, apartments, data centres. From 2006 it returned 6.1% a year at 29% volatility, half the return of stocks for half again the risk, with a 73% fall in 2008 and a beta to stocks of 1.12. From 2010, a start that skips that fall, it returned 8.6% at 20% volatility against stocks’ 14.2% at 17%. Less return, more risk, from either start.
Carving ten points of it out of the stock sleeve of 60/40, so the mix reads 50 stocks, 10 real estate, 40 Treasuries, lowered the return per unit of risk from 0.64 to 0.59 from 2006 and from 0.86 to 0.82 from 2010. The fund adds a second, more volatile equity and calls it diversification.
A household that owns a house already holds property
The average household’s largest asset is its home, levered through a mortgage. A fund of listed landlords adds concentration in the sector where the household is already concentrated, at a volatility the household’s own house does not show only because the price index smooths it. The house page counts the house as a fifth of its value in stock exposure; a real estate fund on top of it is more of the same.