Three-Asset Trend (VTI/VEU/AGG)
33.3% each to VTI, VEU, AGG. Per asset: if above 200-day SMA then hold; if below then BIL. Backtest max drawdown: -14.6%.
Strategy & methodology
33.3% each to VTI, VEU, AGG; Per asset: if above 200-day SMA → hold; if below → BIL; Each third is checked on its own, so it can be 100% T-bills; Not Faber's Trinity Portfolio, which keeps half in buy-and-hold (see the description).
- Strategy type:
- Tactical asset allocation
- Rebalance frequency:
- Monthly
- Original publication:
- 2026-03; results after that are out-of-sample for the original research. All results are backtest simulations.
- Data through:
- Backtest data through 2026-10-22.
Simulated history
Stand-in funds and until when (4)
- VEU: EFA before Mar 8, 2007
- AGG: VBMFX before Sep 26, 2003
- VTI: VTSMX before May 31, 2001
- VTI: VFINX before May 31, 2001
Before these dates the backtest uses a stand-in, not the fund itself, so the results over those stretches show how the rules would have behaved, not what the fund returned.
Research data and disclosures
33.3% each to VTI, VEU, AGG. Per asset: if above 200-day SMA then hold; if below then BIL. Backtest max drawdown: -14.6%. This is a tactical asset allocation strategy. BestFolio supplies the public rule or approach and backtest context; current signals, allocations, and paid interactive data remain restricted to Pro access. Users review the published signal and place any resulting trades in their own brokerage. Displayed returns remain hypothetical and do not represent a customer's brokerage record. The facts above show how current the data is.
- BestFolio supplies
- The monthly signal email and this strategy page; current signals and email alerts require Pro access.
- Customer action
- Review the published signal and place any required trades in your own brokerage. BestFolio does not execute orders.
- Costs and exclusions
- Backtests are net of a modeled one-way transaction cost (10 bps, scaled up to 3x under stress); taxes, fund-expense drift, or market impact are not modeled. No tax, no slippage beyond the stated cost. Methodology limitations
Published result: Engine drift-until-flip-v1, data version 7bd68eba, published 2026-10-17
Is Three-Asset Trend (VTI/VEU/AGG) still working in 2026?
Three-Asset Trend (VTI/VEU/AGG) returned 6.40% over the trailing 12 months and 39.05% over 36 months through 2026-10-22, compared with a full-backtest annualized return of 8.44%. Its full-backtest maximum drawdown was -14.57%. The full sample contains 10618 daily NAV observations from 1985-01-01. These are model results, not investor account returns or a promise. As of 2026-10-22 it is -2.32% below its high-water mark of 2026-08-13, 2 months ago, and its longest run below a previous high was 1.9 years. Recent returns do not establish that the strategy will keep working.
| Period | Return | CAGR | Max drawdown | Observations | Dates |
|---|---|---|---|---|---|
| Trailing 12 months | 6.40% | Not annualized | -7.23% | 252 | 2025-10-22 to 2026-10-22 |
| Trailing 36 months | 39.05% | Not annualized | -7.23% | 754 | 2023-10-20 to 2026-10-22 |
| Full backtest | 2862.64% | 8.44% | -14.57% | 10618 | 1985-01-01 to 2026-10-22 |
Last verified
Common questions about these results
Are these live investor returns?
No. These are the latest model NAV results from the published backtest. A recent date alone does not make a result an independently observed live record. Investor costs, taxes and execution can differ.
Why can a strategy lag for a year?
A tactical model can hold defensive assets during a rally or change positions during reversals. A short window can differ substantially from its full history. Compare cumulative returns over matching dates and inspect drawdowns as well.
How long has it spent below a previous high?
Its last high-water mark was 2026-08-13, 2 months before 2026-10-22, and it is -2.32% below that level now. The longest run below a previous high in the full backtest was 1.9 years. Recovering from a drawdown can take years, and a strong trailing return does not mean a past high has been regained.
Where can I check the signals behind these results?
The Signals tab on this page lists each dated model decision for the selected variant; for Pro strategies they are visible to Pro members. The methodology page explains the backtest assumptions.
Three-Asset Trend (VTI/VEU/AGG) at a glance
Three-Asset Trend (VTI/VEU/AGG) is a tactical asset allocation (TAA) strategy by Meb Faber (adapted by BestFolio) across US Equity, International Equity, US Aggregate Bonds, Cash, rebalanced monthly. Backtested 1985-01-01 to 2026-10-22 (41.8 years): 8.5% CAGR, 0.70 Sharpe, -14.6% max drawdown, 7.5% volatility.
- Type
- Tactical (TAA)
- Author
- Meb Faber (adapted by BestFolio)
- Rebalancing
- Monthly
- Risk
- Moderate
- Period
- 1985-01-01 to 2026-10-22
- CAGR
- 8.5%
- Sharpe
- 0.70
- Max Drawdown
- -14.6%
- Volatility
- 7.5%
Three-Asset Trend (VTI/VEU/AGG) — Tactical Asset Allocation Strategy
Three-Asset Trend splits the portfolio into equal thirds: US stocks (VTI), international stocks (VEU) and US bonds (AGG). Each third is held only while its price is above its 200-day simple moving average; below it, that third moves to T-bills (BIL). The thirds are checked independently, so the portfolio can hold all three, any mix, or be 100% in T-bills. Monthly, on the last trading day.
It was listed as Meb Faber's Trinity Portfolio until October 2026. It is BestFolio's model, inspired by Faber's trend work (the 10-month average timing of his 2007 paper and the Ivy Portfolio), not his Trinity: Faber's Trinity Portfolio keeps half of the money (two thirds in his first 2015 sketch) in a buy-and-hold global asset allocation of ten asset classes and runs trend following on the rest, so it is never all in cash. Followers' holdings did not change with the new name.
Three-Asset Trend (VTI/VEU/AGG): frequently asked questions
- What is Three-Asset Trend (VTI/VEU/AGG)?
- Three-asset trend-following portfolio covering US equity, international equity, and bonds, each filtered by a 200-day SMA. Below-trend assets shift to cash. Simple and effective with just three holdings. Monthly rebalancing.
- Who created the Three-Asset Trend (VTI/VEU/AGG) strategy?
- Three-Asset Trend (VTI/VEU/AGG) was developed by Meb Faber (adapted by BestFolio). It is based on Meb Faber's moving-average trend timing (A Quantitative Approach to Tactical Asset Allocation, 2007), applied by BestFolio to three assets; not his Trinity Portfolio (2016).
- What is the historical return and maximum drawdown of Three-Asset Trend (VTI/VEU/AGG)?
- Backtested from 1985-01-01 to 2026-10-22, Three-Asset Trend (VTI/VEU/AGG) returned 8.5% CAGR with a -14.6% maximum drawdown and a Sharpe ratio of 0.70. Past performance does not guarantee future results.
- How often is Three-Asset Trend (VTI/VEU/AGG) rebalanced?
- Three-Asset Trend (VTI/VEU/AGG) is rebalanced monthly. BestFolio publishes the updated allocation signal each period.
- Is Three-Asset Trend (VTI/VEU/AGG) a tactical asset allocation strategy?
- Yes. Three-Asset Trend (VTI/VEU/AGG) is a tactical asset allocation (TAA) strategy: it adjusts its holdings based on market signals each period rather than holding a fixed allocation.
Backtest Performance (1985-01-01 to 2026-10-22)
| Metric | Three-Asset Trend (VTI/VEU/AGG) |
|---|---|
| CAGR | 8.5% |
| Max Drawdown | -14.6% |
| Sharpe | 0.70 |
| Sortino | 1.07 |
| Volatility | 7.5% |
| Calmar | 0.58 |
| Total Return | 2867.7% |
| Backtest Period | 41.8 years |
Every rebalance fills at the signal-day close, net of modeled transaction costs. Followers trade at the next open; the delayed-close line in the Rebalance Frequency Sensitivity card shows the effect of trading one session later. Execution assumption
Strategy Details
- Type
- Tactical (TAA)
- Rebalancing
- monthly
- Risk Level
- moderate
- Variants
- 1
- Author
- Meb Faber (adapted by BestFolio)
- Source
- Meb Faber's moving-average trend timing (A Quantitative Approach to Tactical Asset Allocation, 2007), applied by BestFolio to three assets; not his Trinity Portfolio (2016)
Asset Classes
- US Equity
- International Equity
- US Aggregate Bonds
- Cash
Categories
Further reading
New to this approach? Read what tactical asset allocation is and how it works.
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