Though the above combination of stocks and bonds is perfectly reasonable, I like to diversify further into a few other categories. Mainly I add the following, either in ETFs, options, futures, or physical assets where applicable. The options columns in the tables below have higher option liquidity, however their expense ratios might be higher for buy and hold.
These in sum do not exceed about 8% of my portfolio. I reduce my bonds allocation by 8% to make room for these. The reasoning is to keep some investments non-correlated with stocks/bonds. [Portfolio Visualizer](https://www.portfoliovisualizer.com/asset-correlations) can be used to investigate correlations.
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### ETFs, options, futures, and indexes
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Schwab ETFs do not have much option liquidity. For such cases, I might use different ETFs or futures to represent the same category. Sometimes it is also cheaper to purchase ETFs with a higher price due to trading fees being based on number of shares. I also may use mutual funds if I don't plan to do much active trading. Index options are also sometimes preferable due to European settlement (i.e. cannot be exercised early). Some equivalents:
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| International Developed | SCHF, SWISX, EFA, VEA | EFA | | /MFS ([MXEA](https://www.ice.com/products/31196848/MSCI-EAFE-Index-Future)) |
Managed futures ETFs have been proposed as an alternative to bonds in a portfolio, because bonds sometimes correlate highly with equities. The managed futures instruments do trend following with derivatives, and may provide good negative correlation with equities, have lower volatility, and generate higher return. [Here](https://testfol.io/?s=0vkpeDtG6iQ) is a backtest comparing a 60/40 (equities/bonds) portfolio with various mixtures of managed futures ETFs.
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Reducing your bonds allocation by half, and using the other half in managed futures might be a good strategy.
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Some videos on managed futures:
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* [ETF Edge on the mechanics of managed futures](https://youtu.be/Uyxk3leyw5M?si=WOaadUAqB28gs6Fv)
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### Typical allocation
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Here is an example of my allocation as of January 2026: