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Bogleheads Three-fund Portfolio

Last updated Sep 23, 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
4.88%
8.61%
Bogleheads Three-fund Portfolio
Benchmark (^GSPC)
Portfolio components

Returns

As of Sep 23, 2023, the Bogleheads Three-fund Portfolio returned 8.90% Year-To-Date and 7.29% of annualized return in the last 10 years.


1 month6 monthsYear-To-Date1 year5 years (annualized)10 years (annualized)
Benchmark-1.94%8.79%12.52%16.97%8.21%9.81%
Bogleheads Three-fund Portfolio-1.17%5.07%8.90%16.22%6.02%7.27%
VTI
Vanguard Total Stock Market ETF
-1.91%9.30%13.03%17.85%9.19%11.21%
BND
Vanguard Total Bond Market ETF
-0.60%-3.51%0.08%0.78%0.34%1.19%
VEA
Vanguard FTSE Developed Markets ETF
-0.35%3.81%7.92%23.85%3.34%4.09%

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 0.92. A Sharpe ratio between 0 and 1.0 is considered sub-optimal.

-1.000.001.002.003.004.000.92

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
0.92
0.81
Bogleheads Three-fund Portfolio
Benchmark (^GSPC)
Portfolio components

Dividend yield

Bogleheads Three-fund Portfolio granted a 2.32% dividend yield in the last twelve months.


TTM20222021202020192018201720162015201420132012
Bogleheads Three-fund Portfolio2.32%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
1.56%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
3.01%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%

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
0.82
BND
Vanguard Total Bond Market ETF
-0.07
VEA
Vanguard FTSE Developed Markets ETF
1.11

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
-10.10%
-9.93%
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 2.81%, 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
2.81%
3.41%
Bogleheads Three-fund Portfolio
Benchmark (^GSPC)
Portfolio components