[afryer]

Great job sticking to your investment principles. Every investor needs a 'Ulysses pact' that ties them to the ship to prevent the sirens from eating them.

It sounds like your account is mostly taxable, have you ever considered getting your 3-fund exposure through a '90/60' fund like NTSX? The fund uses bond futures to get the increased exposure. It also has some tax efficiencies vs bond etfs. There is a US (NTSX) and International (NTSI) version.

You could allocate 2/3 of the portfolio to NTSX/NTSI to achieve a 60/40 and then have the rest for either opportunistic market timing/security selection ("dry powder") or as an allocation to alternative beta (say something like managed futures, MLPs, private businesses, etc.)

Obviously, taxes are a primary consideration, but I find these types of funds interesting in theory!

[deanmoriarty]

I am generally not interested in taking more risk (I’m not saying your fund has more exposure to risk, I haven’t checked), and for the bonds part of my taxable portfolio I invest in diversified muni funds, VWIUX specifically. At the current SEC yield of 3.2% and my marginal tax rate of 40.8% this implies a tax-equivalent yield of 5.4%, which is good enough in my books.

[afryer]

Totally, understand what you are saying and I think you will have success. I'm not saying to necessarily take more risk, I am saying to use 2/3 of capital to get access to tax efficient 60/40 exposure. Then I would look to further diversify. Whether it's munis to capture credit risk premiums, managed futures for commodity risk premiums, or taleb-style option trading for tail risk premiums. I think these simple liquid alternative funds could improve risk adjusted returns for boglehead style X-fund investors and not increase complexity or break the investment philosophy. Happy investing.