The majority of the fixed-income allocation goes to the PGF. It's very new, but in its short time on the market it hasn't moved around very much (a good thing for a fixed-income product and for a lazy portfolio). According to the PowerShares Web site, it yields 6.27%. The fund owns preferred stocks of investment-grade financial companies such as Royal Bank of Scotland and Citigroup ( C). The other, smaller fixed-income component is the AVK, which yields more than 7%. It's relatively volatile, but I believe it offers the chance for a little less sensitivity to interest rates. The final component is Australian dollar exposure through the FXA, which obviously hedges a weak dollar and has a fine yield of 5%. Obviously, this mix has its strengths and weaknesses. It allocates 75% to stocks, 20% to bonds and 5% to cash. It yields close to 3.4%, has a beta of 0.79 compared to 1.0 for the S&P 500 and has a standard deviation of 10.83 compared to 13.02 for the S&P 500 (beta and standard deviation numbers from PortfolioScience.com). The drawbacks include very light exposure to health care and technology. Health care seems like a very important theme for the next few years as the population gets older, and at some point technology will again provide leadership to the market. But again, that's generally a drawback of a lazy portfolio: By its nature it has to take a conservative bent, so it's not likely to enjoy the excitement (or gains) of big winners. To repeat, I do not have this mix for any clients, and as you'll see in the disclosures I only use a couple of these ETFs in my investing. But it's an intriguing case study of how some newer investment products fit into a portfolio. Please note that due to factors including low market capitalization and/or insufficient public float, we consider WisdomTree Total Earnings ETF, Rydex S&P Small Cap 600 Pure Value, WisdomTree Pacific Ex-Japan High-Yielding Equity Fund, Claymore BNY BRIC ETF, iShares S&P Global Energy Index Fund, PowerShares DB Gold, PowerShares Financial Preferred, Advent Claymore Convertible Bond Fund and Rydex CurrencyShares Australia to be small-cap stocks. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.