History
The Ivy Portfolio was introduced by Meb Faber and Eric Richardson in their 2009 book The Ivy Portfolio. The idea was to approximate the diversification of large university endowments such as Yale and Harvard using only liquid ETFs. Unlike institutional portfolios, which rely heavily on private equity, hedge funds and illiquid assets, the Ivy Portfolio replaces those exposures with publicly traded proxies. It became popular among retail investors after the Global Financial Crisis, when diversification beyond traditional stock/bond portfolios gained renewed attention.
Philosophy
Replicate institutional diversification using only liquid instruments. Instead of relying on illiquid alternatives, use ETFs representing major asset classes: equities, bonds, real estate and commodities. The goal is broad diversification across economic drivers rather than reliance on a single asset class.