Trinity Portfolio (Meb Faber)

The Trinity Portfolio is Meb Faber's framework for combining buy-and-hold with trend following, introduced on his blog in 2015 and set out in a Cambria white paper dated December 2016. Half the money stays in a fixed global mix of stocks, bonds, and real assets; the other half holds the five strongest of the same ten asset classes, each only while it trades above its 10-month average.

The idea#

Faber builds the portfolio in three steps. First, own the whole world: a global mix close to the market portfolio of stocks, bonds, and real assets, which he calls Global Asset Allocation. Second, tilt the stock holdings toward value and momentum, styles that have beaten market-cap weighting over long periods. Third, add trend following, which has historically cut drawdowns.

The name refers to those three elements. Faber splits the money evenly between the buy-and-hold mix and a trend model because each tends to lag the other for years at a time, and investors struggle to stick with either alone. Holding both is meant to be easier to live with.

How it works#

Half of the portfolio is buy-and-hold at Faber's Global Asset Allocation weights:

• US stocks 18%, split between large-cap value (IWD) and momentum (PDP)
• Developed-market stocks 13.5%, as international value (EFV)
• Emerging-market stocks 4.5% (EEM)
• US corporate bonds 19.8% (LQD)
• Long-term Treasuries 13.5% (TLT)
• Foreign government bonds 14.4% (BWX)
• TIPS 1.8% (TIP)
• Commodities 5% (GSG), gold 5% (GLD), and US real estate 4.5% (VNQ)

The other half follows a trend model Faber calls Global Trend. At the close of the last trading day of each month:

1. Score the ten asset classes by the average of their 1-, 3-, 6-, and 12-month returns. US stocks are scored on the S&P 500 (SPY).
2. Take the top five, 10% of the whole portfolio each.
3. Hold each pick only while its price is above its 10-month average; otherwise hold Treasury bills (BIL) in its place. A chosen US stock slot holds IWD and PDP half each.

Both halves are rebalanced monthly. The paper's value and momentum tilts are Cambria's own stock, country, and bond selection methods, so index funds with the same tilts stand in for them, and the paper does not name its momentum measure; this version borrows the one from Faber's GTAA Aggressive models.

What the backtest shows#

The ETF-era test starts in October 2008, once the foreign bond fund has enough history. Since then the Trinity Portfolio compounded at about 7.5% a year with a worst drawdown of about 18%. The S&P 500 returned about 15% a year with a worst drawdown of about a third, and a 60/40 portfolio returned about 10% with a worst drawdown near 21%. Trinity beat the S&P 500 on risk-adjusted return but trailed the 60/40 portfolio on both return and risk-adjusted return.

It was steady rather than strong. It lost 10% in 2022, about half the S&P 500's loss, and gained 20% in 2025, a little ahead of the market. But in 2013 it made 4% while the S&P 500 rose 32%, and it lost money in 2015 and 2018.

Its worst drawdown came in the COVID crash, from January to March 2020, and it recovered by July 2020. Since the white paper it has returned about 7.5% a year.

There is no simulated history for this version. The foreign bond fund and the momentum fund have no modelled record before they launched.

When it struggles#

• US-led bull markets. US stocks are under a fifth of the buy-and-hold half, while bonds are about half of it.
• Rising interest rates. Corporate, long-term, and foreign bonds make up about half of the fixed half, and they tend to lose value together when rates rise.
• Sudden crashes. The buy-and-hold half has no protection, and the trend half checks only once a month.

Using it on Tactfolio#

The live strategy above runs both halves on daily data, with a 210-session average standing in for ten month-ends and index funds standing in for Cambria's tilts. Copy it to change the split between the halves, or compare the trend half with GTAA Aggressive 6.

Year by year

* Partial year.

The rules as implemented

This is the exact tree Tactfolio runs, rebalanced monthly with signals and trades at the close. Open it to inspect or copy it.

Sources and caveats

• Meb Faber, The Trinity Portfolio: A Long-Term Investing Framework Engineered for Simplicity, Safety, and Outperformance (Cambria, 2016)
• Meb Faber, The Trinity Portfolio (2015)

• Half is buy-and-hold at the paper's Global Asset Allocation weights: US stocks 18%, developed stocks 13.5%, emerging stocks 4.5%, corporate bonds 19.8%, 30-year Treasuries 13.5%, foreign 10-year bonds 14.4%, TIPS 1.8%, commodities 5%, gold 5%, and REITs 4.5%. The other half holds the top half of those ten asset classes, five at 10% each, by momentum, each only while above its 10-month average, else Treasury bills. Both halves are rebalanced monthly.
• The paper's value and momentum tilts are Cambria's own stock, country, and bond selection strategies. Funds stand in: IWD (US large value) and PDP (US momentum) split the US stock weight, EFV (MSCI EAFE Value) replaces developed stocks, and BWX has no yield tilt. EEM, LQD, TLT, TIP, GSG, GLD, VNQ, and BIL cover the other asset classes.
• In the trend half, the US stock slot is ranked and trend-tested on the S&P 500 (SPY) and, when chosen, holds IWD and PDP half each.
• The paper says only that Global Trend sorts by momentum and resembles GTAA Aggressive; this version uses GTAA Aggressive's measure. Momentum is the plain average of the 1-, 3-, 6-, and 12-month total returns, with months counted as 21 trading sessions rather than calendar month-ends.
• Faber compares each month-end close with the average of the last ten month-end closes; this version uses the daily 210-session average, the closest daily equivalent.
• Signals and trades use the close of the last trading day of each month, as in the source.

Common questions#

What is the Trinity Portfolio?#

It is Meb Faber's portfolio that puts half its money in a global buy-and-hold mix with value and momentum tilts and half in a trend-following model that holds the strongest asset classes above their 10-month averages.

What ETFs does the Trinity Portfolio use?#

This version uses IWD, PDP, EFV, EEM, LQD, TLT, BWX, TIP, GSG, GLD, and VNQ, with SPY to score US stocks and BIL as cash. Cambria also runs an ETF based on the Trinity framework.

Is the Trinity Portfolio the same as the Trinity study?#

No. The Trinity study is a well-known paper on safe withdrawal rates in retirement, by professors at Trinity University. Faber's Trinity Portfolio is an asset allocation strategy named after its three building blocks.

Does the Trinity Portfolio still work?#

Since the white paper it has returned about 7.5% a year with a worst drawdown near 18%. Over the whole ETF-era test it returned less than a 60/40 portfolio. The live record on Tactfolio shows how it is doing now.

Related strategies

• Global Tactical Asset Allocation (GTAA 5)
• GTAA 13: Faber’s 13-asset tactical allocation
• US Risk Parity Trend-Following (The Trend is Our Friend)
• Global Risk Parity Trend-Following (Clare, Seaton, Smith & Thomas)