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Bogleheads Three-fund Portfolio

Last updated Sep 21, 2023

The three-fund portfolio is a portfolio popularized by Jack Bogle fans (boggleheads). It uses only three fundamental asset classes: a U.S total stock market fund, a total international stock market fund, and a total bond market fund. The portfolio could be replicated using three low-cost ETFs.

Asset Allocation


BND 20%VTI 50%VEA 30%BondBondEquityEquity
PositionCategory/SectorWeight
BND
Vanguard Total Bond Market ETF
Total Bond Market20%
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 Three-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
6.62%
10.86%
Bogleheads Three-fund Portfolio
Benchmark (^GSPC)
Portfolio components

Returns

As of Sep 21, 2023, the Bogleheads Three-fund Portfolio returned 10.50% Year-To-Date and 7.41% of annualized return in the last 10 years.


1 month6 monthsYear-To-Date1 year5 years (annualized)10 years (annualized)
Benchmark0.33%11.48%14.66%16.16%8.51%9.99%
Bogleheads Three-fund Portfolio0.75%6.88%10.50%14.65%6.27%7.44%
VTI
Vanguard Total Stock Market ETF
0.40%12.10%15.20%16.72%9.51%11.42%
BND
Vanguard Total Bond Market ETF
0.27%-3.11%0.29%-0.33%0.34%1.24%
VEA
Vanguard FTSE Developed Markets ETF
1.65%5.08%9.62%21.13%3.67%4.27%

Asset Correlations Table

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

BNDVEAVTI
BND1.00-0.15-0.20
VEA-0.151.000.84
VTI-0.200.841.00

Sharpe Ratio

The current Bogleheads Three-fund Portfolio Sharpe ratio is 0.94. A Sharpe ratio between 0 and 1.0 is considered sub-optimal.

-1.000.001.002.003.004.000.94

The Sharpe ratio of Bogleheads Three-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
0.94
0.82
Bogleheads Three-fund Portfolio
Benchmark (^GSPC)
Portfolio components

Dividend yield

Bogleheads Three-fund Portfolio granted a 2.48% dividend yield in the last twelve months.


TTM20222021202020192018201720162015201420132012
Bogleheads Three-fund Portfolio2.48%2.26%2.03%1.88%2.55%2.89%2.51%2.79%2.86%3.15%2.79%3.37%
VTI
Vanguard Total Stock Market ETF
1.90%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
3.00%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
3.08%2.97%3.32%2.22%3.38%3.84%3.27%3.71%3.66%4.75%3.47%4.08%

Expense Ratio

The Bogleheads Three-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.


0.05%
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
0.83
BND
Vanguard Total Bond Market ETF
-0.07
VEA
Vanguard FTSE Developed Markets ETF
1.01

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
-8.78%
-8.22%
Bogleheads Three-fund Portfolio
Benchmark (^GSPC)
Portfolio components

Worst Drawdowns

The table below shows the maximum drawdowns of the Bogleheads Three-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 Three-fund Portfolio is 47.74%, recorded on Mar 9, 2009. It took 539 trading sessions for the portfolio to recover.


Depth

Start

To Bottom

Bottom

To Recover

End

Total

-47.74%Nov 1, 2007339Mar 9, 2009539Apr 27, 2011878
-28.12%Feb 13, 202027Mar 23, 202095Aug 6, 2020122
-24.47%Nov 9, 2021235Oct 14, 2022
-17.25%May 2, 2011108Oct 3, 2011111Mar 13, 2012219
-15.25%Jan 29, 2018229Dec 24, 201881Apr 23, 2019310

Volatility Chart

The current Bogleheads Three-fund Portfolio volatility is 2.62%, 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
2.62%
3.27%
Bogleheads Three-fund Portfolio
Benchmark (^GSPC)
Portfolio components