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Bogleheads Four-fund Portfolio

Last updated Sep 23, 2023

The Bogleheads Four-fund Portfolio is the extension of the Bogleheads Three-fund Portfolio with the addition of international bonds. It uses four fundamental asset classes: a U.S total stock market fund, a total international stock market fund, a total bond market fund, and a total international bond market. The portfolio could be replicated using four low-cost ETFs.

Asset Allocation


BND 15%BNDX 5%VTI 50%VEA 30%BondBondEquityEquity
PositionCategory/SectorWeight
BND
Vanguard Total Bond Market ETF
Total Bond Market15%
BNDX
Vanguard Total International Bond ETF
Total Bond Market5%
VTI
Vanguard Total Stock Market ETF
Large Cap Growth Equities50%
VEA
Vanguard FTSE Developed Markets ETF
Foreign Large Cap Equities30%

Performance

The chart shows the growth of an initial investment of $10,000 in Bogleheads Four-fund Portfolio, comparing it to the performance of the S&P 500 index or another benchmark. All prices have been adjusted for splits and dividends. The portfolio is rebalanced Quarterly


0.00%5.00%10.00%15.00%AprilMayJuneJulyAugustSeptember
4.91%
9.22%
Bogleheads Four-fund Portfolio
Benchmark (^GSPC)
Portfolio components

Returns

As of Sep 23, 2023, the Bogleheads Four-fund Portfolio returned 9.04% Year-To-Date and 7.33% of annualized return in the last 10 years.


1 month6 monthsYear-To-Date1 year5 years (annualized)10 years (annualized)
Benchmark-1.55%9.05%12.97%17.44%8.37%9.90%
Bogleheads Four-fund Portfolio-1.29%4.85%8.90%16.15%6.00%7.32%
VTI
Vanguard Total Stock Market ETF
-1.91%9.02%13.03%17.85%9.27%11.26%
BND
Vanguard Total Bond Market ETF
-1.33%-3.22%-0.66%0.03%0.14%1.12%
VEA
Vanguard FTSE Developed Markets ETF
-0.35%2.91%7.92%23.85%3.33%4.11%
BNDX
Vanguard Total International Bond ETF
-0.91%-0.97%2.34%1.80%0.04%1.82%

Asset Correlations Table

The table below shows the correlation coefficients between the assets in the portfolio.

BNDXBNDVEAVTI
BNDX1.000.70-0.04-0.04
BND0.701.00-0.04-0.07
VEA-0.04-0.041.000.82
VTI-0.04-0.070.821.00

Sharpe Ratio

The current Bogleheads Four-fund Portfolio Sharpe ratio is 0.93. A Sharpe ratio between 0 and 1.0 is considered sub-optimal.

-1.000.001.002.003.004.000.93

The Sharpe ratio of Bogleheads Four-fund Portfolio lies between the 25th and 75th percentiles. It indicates that the portfolio's risk-adjusted performance is in line with the majority of portfolios. This suggests a balanced approach to risk and return, which might be suitable for a broad range of investors.


Rolling 12-month Sharpe Ratio-0.500.000.501.00AprilMayJuneJulyAugustSeptember
0.99
0.89
Bogleheads Four-fund Portfolio
Benchmark (^GSPC)
Portfolio components

Dividend yield

Bogleheads Four-fund Portfolio granted a 2.28% dividend yield in the last twelve months.


TTM20222021202020192018201720162015201420132012
Bogleheads Four-fund Portfolio2.28%2.21%2.12%1.82%2.58%2.90%2.49%2.75%2.80%3.07%2.66%3.16%
VTI
Vanguard Total Stock Market ETF
1.56%1.68%1.25%1.48%1.88%2.21%1.88%2.15%2.27%2.06%2.07%2.58%
BND
Vanguard Total Bond Market ETF
3.03%2.65%2.06%2.36%2.97%3.15%2.93%2.97%3.12%3.46%3.56%4.26%
VEA
Vanguard FTSE Developed Markets ETF
3.13%2.97%3.32%2.22%3.38%3.84%3.27%3.71%3.66%4.75%3.47%4.08%
BNDX
Vanguard Total International Bond ETF
1.99%1.53%3.84%1.18%3.67%3.35%2.56%2.22%1.94%1.87%1.07%0.00%

Expense Ratio

The Bogleheads Four-fund Portfolio has an expense ratio of 0.04% which is considered to be low. Below you can find the expense ratios of portfolio funds side-by-side and effortlessly compare their relative costs.


0.07%
0.00%2.15%
0.05%
0.00%2.15%
0.03%
0.00%2.15%

Risk-Adjusted Performance

This table presents a comparison of risk-adjusted performance metrics for positions. Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.


Sharpe ratioSortino ratioOmega ratioCalmar ratioUlcer Index
VTI
Vanguard Total Stock Market ETF
0.82
BND
Vanguard Total Bond Market ETF
-0.03
VEA
Vanguard FTSE Developed Markets ETF
1.11
BNDX
Vanguard Total International Bond ETF
0.21

Drawdowns Chart

The Drawdowns chart displays portfolio losses from any high point along the way.


-18.00%-16.00%-14.00%-12.00%-10.00%-8.00%-6.00%-4.00%AprilMayJuneJulyAugustSeptember
-10.07%
-9.57%
Bogleheads Four-fund Portfolio
Benchmark (^GSPC)
Portfolio components

Worst Drawdowns

The table below shows the maximum drawdowns of the Bogleheads Four-fund Portfolio. A maximum drawdown is an indicator of risk. It shows a reduction in portfolio value from its maximum due to a series of losing trades.

The maximum drawdown since January 2010 for the Bogleheads Four-fund Portfolio is 28.24%, recorded on Mar 23, 2020. It took 99 trading sessions for the portfolio to recover.


Depth

Start

To Bottom

Bottom

To Recover

End

Total

-28.24%Feb 13, 202027Mar 23, 202099Aug 12, 2020126
-24.38%Nov 9, 2021233Oct 12, 2022
-15.13%Jan 29, 2018229Dec 24, 201875Apr 12, 2019304
-13.8%May 22, 2015183Feb 11, 2016117Jul 29, 2016300
-6.87%Jul 7, 201473Oct 16, 201427Nov 24, 2014100

Volatility Chart

The current Bogleheads Four-fund Portfolio volatility is 2.72%, representing the average percentage change in the investments's value, either up or down over the past month. The chart below shows the rolling one-month volatility.


2.00%2.50%3.00%3.50%4.00%4.50%5.00%5.50%AprilMayJuneJulyAugustSeptember
2.72%
3.36%
Bogleheads Four-fund Portfolio
Benchmark (^GSPC)
Portfolio components