Mama Bear Portfolio
The Mama Bear Portfolio is a risk-managed, diversified allocation designed by investing author and blogger Paul Merriman, known for his extensive research and writing on factor-based and evidence-driven investing through the Paul Merriman Foundation. The Mama Bear is positioned between Merriman's more aggressive Papa Bear Portfolio and simpler lazy portfolios, aiming to provide broad multi-asset class diversification with factor tilts toward small-cap and value stocks — but with a more moderate overall risk profile than the Papa Bear.
Investment Philosophy
Merriman's design philosophy draws on the academic evidence for the small-cap and value premiums, as well as the diversification benefits of holding multiple distinct equity asset classes globally. The Mama Bear applies these factor tilts across a range of equity sleeves — US large blend, US large value, US small blend, US small value, international equivalents, and bonds — but weights them to produce a less aggressive outcome than the Papa Bear. The premise is that factor diversification across asset classes improves long-run risk-adjusted returns relative to holding only a total market index.
Who It's For
This portfolio suits investors who believe in factor investing and want meaningful small-cap and value exposure, but with a somewhat more moderate risk profile than an all-equity or highly aggressive factor portfolio. It is appropriate for investors with medium-to-long time horizons who are prepared to accept tracking error relative to a simple index fund strategy.
Pros
- Broad factor diversification across multiple US and international equity sleeves
- Value and small-cap tilts aim to capture documented risk premia over the long run
- More moderate risk profile than the Papa Bear while retaining the factor-based approach
Cons
- Multiple sleeves require more frequent rebalancing and monitoring than a three-fund portfolio
- Factor tilts can produce sustained periods of underperformance relative to plain cap-weighted indices
- More complex to implement without access to low-cost factor-tilted index funds across all sleeves
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Average Allocation
Based on historical average weights across all rebalance periods.
Performance Snapshot
Rolling Returns
| Period | Low | Average | High |
|---|---|---|---|
| 1 Year | -19.5% | +13.1% | +64.3% |
| 3 Year | -2.9% | +12.5% | +34.6% |
| 5 Year | -1.0% | +12.8% | +28.9% |
| 10 Year | +3.3% | +12.7% | +23.9% |
Growth of $10,000
Historical Drawdown
Percentage decline from the portfolio's peak value at each point in time.
Rolling Returns
Annualised return for each rolling period ending on that date.
Annualised return for each 1Y period ending on that date.