Asset Allocation
| Position | Category/Sector | Target Weight |
|---|---|---|
BND Vanguard Total Bond Market ETF | Total Bond Market | 60% |
VTI Vanguard Total Stock Market ETF | Large Cap Blend Equities | 40% |
Find the right asset allocation for Stocks/Bonds 40/60 Portfolio
Add portfolio to the optimizer to find optimal allocations for your target — whether that's maximizing returns, minimizing drawdowns, or balancing risk across holdings.
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Performance Chart
The chart shows the growth of an initial investment of $10,000 in Stocks/Bonds 40/60 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 when any position deviates by more than 10.0% from its target allocation.
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Returns By Period
As of Jun 13, 2026, the Stocks/Bonds 40/60 Portfolio returned 4.15% Year-To-Date and 7.19% of annualized return in the last 10 years.
| Position | 1D | 1M | YTD | 6M | 1Y | 3Y* | 5Y* | 10Y* |
|---|---|---|---|---|---|---|---|---|
Benchmark S&P 500 Index | 0.50% | 0.31% | 8.56% | 8.85% | 24.33% | 19.37% | 11.84% | 13.61% |
Portfolio Stocks/Bonds 40/60 Portfolio | 0.15% | 1.03% | 4.15% | 4.42% | 13.09% | 10.76% | 5.11% | 7.19% |
| Portfolio components: | ||||||||
BND Vanguard Total Bond Market ETF | -0.12% | 1.03% | 0.52% | 0.91% | 4.77% | 4.17% | 0.03% | 1.58% |
VTI Vanguard Total Stock Market ETF | 0.57% | 1.00% | 9.62% | 9.69% | 26.27% | 20.60% | 12.20% | 15.02% |
Monthly Returns
Based on dividend-adjusted daily data since Apr 10, 2007, Stocks/Bonds 40/60 Portfolio's average daily return is +0.03%, while the average monthly return is +0.56%. At this rate, an investment would double in approximately 10.3 years.
Historically, 68% of months were positive and 32% were negative. The best month was Apr 2020 with a return of +7.0%, while the worst month was Oct 2008 at -8.5%. The longest winning streak lasted 15 consecutive months, and the longest losing streak was 4 months.
On a daily basis, Stocks/Bonds 40/60 Portfolio closed higher 56% of trading days. The best single day was Oct 13, 2008 with a return of +7.6%, while the worst single day was Mar 12, 2020 at -7.2%.
| Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | Total | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2026 | 0.77% | 0.76% | -3.03% | 4.15% | 2.22% | -0.63% | 4.15% | ||||||
| 2025 | 1.58% | 0.54% | -2.32% | 0.18% | 2.07% | 2.97% | 0.76% | 1.65% | 2.03% | 1.27% | 0.48% | -0.18% | 11.48% |
| 2024 | 0.36% | 1.26% | 1.82% | -3.17% | 2.91% | 1.76% | 2.19% | 1.77% | 1.62% | -1.76% | 3.31% | -2.21% | 10.05% |
| 2023 | 4.77% | -2.55% | 2.76% | 0.81% | -0.50% | 2.52% | 1.38% | -1.16% | -3.40% | -1.95% | 6.48% | 4.26% | 13.66% |
| 2022 | -3.65% | -1.63% | -0.32% | -6.02% | 0.51% | -4.27% | 5.15% | -3.14% | -6.19% | 2.51% | 4.31% | -2.83% | -15.18% |
| 2021 | -0.63% | 0.32% | 0.70% | 2.53% | 0.29% | 1.54% | 1.42% | 1.03% | -2.39% | 2.69% | -0.44% | 1.35% | 8.60% |
Benchmark Metrics
Stocks/Bonds 40/60 Portfolio has an annualized alpha of 2.68%, beta of 0.40, and R2 of 0.85 versus S&P 500 Index. Calculated based on daily prices since April 10, 2007.
- This portfolio participates in less of S&P 500 Index's moves in both directions, but captures a larger share of gains (46.36%) than losses (45.13%) - typical of diversified or defensive assets.
- This portfolio generated an annualized alpha of 2.68% versus S&P 500 Index - delivering returns beyond what market exposure alone would predict.
- Beta of 0.40 indicates this portfolio moves significantly less than S&P 500 Index - a genuinely defensive profile with reduced participation in both market rallies and downturns.
- Alpha
- 2.68%
- Beta
- 0.40
- R²
- 0.85
- Upside Capture
- 46.36%
- Downside Capture
- 45.13%
Expense Ratio
Stocks/Bonds 40/60 Portfolio has an expense ratio of 0.03%, which is considered low. Below, you can find the expense ratios of the portfolio's funds side by side and easily compare their relative costs.
Return for Risk
Risk / Return Rank
Stocks/Bonds 40/60 Portfolio ranks 55 for risk / return — on par with similar Portfolios. You're getting a typical balance of risk and reward. Not a standout, but not a red flag either — a reasonable choice if other factors align with your goals.
Return / Risk — by metrics
The table below presents risk-adjusted performance metrics for Stocks/Bonds 40/60 Portfolio and compares them with S&P 500 Index.
Values are calculated on a 1-year rolling basis and updated daily. Risk-adjusted metrics are more stable over longer periods — use the period switch above to explore them.
| Portfolio | Benchmark | Difference | |
|---|---|---|---|
| Sharpe ratioReturn per unit of total volatility | 2.01 | 1.86 | +0.15 |
| Sortino ratioReturn per unit of downside risk | 2.89 | 2.53 | +0.36 |
| Omega ratioGain probability vs. loss probability | 1.38 | 1.34 | +0.04 |
| Calmar ratioReturn relative to maximum drawdown | 2.72 | 2.53 | +0.19 |
| Martin ratioReturn relative to average drawdown | 12.14 | 11.37 | +0.77 |
How much return does each position deliver for the risk it carries? Higher values mean better reward for the risk taken.
| Position | Risk / Return Rank | Sharpe ratio | Sortino ratio | Omega ratio | Calmar ratio | Martin ratio |
|---|---|---|---|---|---|---|
BND Vanguard Total Bond Market ETF | 36 | 1.18 | 1.77 | 1.21 | 1.65 | 4.81 |
VTI Vanguard Total Stock Market ETF | 67 | 1.97 | 2.67 | 1.35 | 2.79 | 12.52 |
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Dividends
Dividend yield
Stocks/Bonds 40/60 Portfolio provided a 2.79% dividend yield over the last twelve months.
| Position | TTM | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Portfolio | 2.79% | 2.76% | 2.71% | 2.43% | 2.23% | 1.76% | 2.00% | 2.34% | 2.50% | 2.21% | 2.28% | 2.34% |
| Portfolio components: | ||||||||||||
BND Vanguard Total Bond Market ETF | 3.96% | 3.86% | 3.67% | 3.09% | 2.60% | 2.12% | 2.38% | 2.72% | 2.81% | 2.54% | 2.51% | 2.57% |
VTI Vanguard Total Stock Market ETF | 1.03% | 1.12% | 1.27% | 1.44% | 1.66% | 1.21% | 1.42% | 1.78% | 2.04% | 1.71% | 1.92% | 1.98% |
Drawdowns
Drawdowns Chart
The Drawdowns chart displays portfolio losses from any high point along the way. Drawdowns are calculated considering price movements and all distributions paid, if any.
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Worst Drawdowns
The table below displays the maximum drawdowns of the Stocks/Bonds 40/60 Portfolio. A maximum drawdown is a measure of risk, indicating the largest reduction in portfolio value due to a series of losing trades.
The maximum drawdown for the Stocks/Bonds 40/60 Portfolio was 22.91%, occurring on Mar 9, 2009. Recovery took 176 trading sessions.
The current Stocks/Bonds 40/60 Portfolio drawdown is 0.95%.
Related event | Drawdown | Fall | Recovery | Underwater |
|---|---|---|---|---|
Financial crisis2007–2009 | -22.91%Mar 2009 | 9mo 23d | 8mo 12d | 1y 6moMay 2008 - Nov 2009 |
Bear market2022 | -19.43%Oct 2022 | 11mo 10d | 1y 7mo | 2y 7moNov 2021 - Jun 2024 |
COVID crash2020 | -16.17%Mar 2020 | 28d | 2mo 17d | 3mo 15dFeb 2020 - Jun 2020 |
2025 selloff2025 | -8.05%Apr 2025 | 4mo | 2mo 3d | 6mo 3dDec 2024 - Jun 2025 |
Rate-hike selloffLate 2018 | -7.87%Dec 2018 | 3mo 26d | 1mo 27d | 5mo 23dAug 2018 - Feb 2019 |
Volatility
Volatility Chart
The chart below shows the rolling one-month volatility.
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Diversification
AI Analysis
Thesis
The portfolio is making the classic two-asset bet: mostly U.S. aggregate bonds, with a large sleeve of U.S. equities, and the implicit claim is that those two things do not usually fail on the same schedule.
The numbers
- The diversification ratio sits at 1.2–1.3 across horizons, around the 33rd–54th percentile on the platform; that is modest diversification, not much more.
- The effective asset count is 1.92 out of 2, so the weights are spread, but only in the arithmetic sense.
- BND (Total Bond Market) and VTI (Large Cap Blend Equities) have correlation of -0.13, which is mildly helpful, though not enough to turn the portfolio into some grand machine of offsetting risks.
What works
- The portfolio has two genuinely different return engines: rate-sensitive fixed income and broad equity earnings, and those are not the same macro trade in disguise.
- The low position-to-portfolio correlation for BND, 0.18, means it still does some diversifying work when equities dominate the risk budget.
What does not
- The diversification benefit is real but limited; the portfolio is still mostly exposed to the broad “U.S. financial conditions” complex, which is a tidy phrase for several things moving together.
- The 1Y DR of 1.2 being below the longer-run readings suggests the hedge relationship has been a little less helpful lately.
Stress Scenario
- A inflation-plus-growth scare can make both sleeves unhappy in different ways: bonds through higher yields, equities through discount-rate pressure. The portfolio then discovers that “not perfectly correlated” is not the same as “independent.”
Worth knowing
- Portfolios with this structure often behave more like a single balanced risk sleeve than like two unrelated sources of return.
- The correlation profile is simple enough that most of the diversification story lives in the bond/equity split, which is also why the story is so familiar.
Diversification Metrics
Number of Effective Assets
The portfolio contains 2 assets, with an effective number of assets of 1.92, reflecting the diversification based on asset allocation. Your capital is spread almost evenly across your holdings, indicating a well-balanced allocation. Note that true diversification also depends on the correlations between assets — check the diversification ratio below.
Diversification Ratio
1Y | 3Y | 5Y | 10Y | All Time | |
|---|---|---|---|---|---|
Diversification Ratio | 1.18 | 1.24 | 1.25 | 1.25 | 1.30 |
The portfolio has a diversification ratio of 1.30, in line with the typical range across portfolios. There's room to improve by adding less correlated assets.
Stocks/Bonds 40/60 Portfolio correlation to the S&P 500 Index
| Correlation | |
|---|---|
Correlation (1Y) Calculated over the trailing 1-year period | 0.92 |
Correlation (3Y) Calculated over the trailing 3-year period | 0.88 |
Correlation (5Y) Calculated over the trailing 5-year period | 0.88 |
Correlation (10Y) Calculated over the trailing 10-year period | 0.89 |
Correlation (All Time) Calculated using the full available price history since Apr 10, 2007 | 0.90 |
Benchmark Correlations
Correlation vs. S&P 500 Index. VTI has the highest benchmark correlation at 0.99, while BND has the lowest at -0.14.
Asset Correlations Table
Find what Stocks/Bonds 40/60 Portfolio is missing
See which holdings overlap, where Stocks/Bonds 40/60 Portfolio is concentrated, and which low-correlation assets could fill the gaps.
Analyze Diversification