Two Fund Strategy
A mix of a total stock market index fund and a total bond market index fund, diversifying stock holdings with bonds. Warren Buffett endorses this strategy for its simplicity and effectiveness.
VTSAX VBTLX
Asset Allocation
| Position | Category/Sector | Weight |
|---|---|---|
VBTLX Vanguard Total Bond Market Index Fund Admiral Shares | Total Bond Market | 30% |
VTSAX Vanguard Total Stock Market Index Fund Admiral Shares | Large Cap Blend Equities | 70% |
Performance
Performance Chart
The chart shows the growth of an initial investment of $10,000 in Two Fund Strategy, 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
The earliest data available for this chart is Nov 12, 2001, corresponding to the inception date of VBTLX
Returns By Period
As of Nov 13, 2024, the Two Fund Strategy returned 18.34% Year-To-Date and 9.61% of annualized return in the last 10 years.
| Year-To-Date | 1 month | 6 months | 1 year | 5 years (annualized) | 10 years (annualized) | |
|---|---|---|---|---|---|---|
^GSPC S&P 500 | 25.48% | 2.14% | 12.76% | 33.14% | 13.96% | 11.39% |
| Two Fund Strategy | 18.29% | 1.58% | 10.15% | 26.15% | 10.69% | 9.60% |
| Portfolio components: | ||||||
VTSAX Vanguard Total Stock Market Index Fund Admiral Shares | 26.07% | 2.74% | 13.53% | 35.18% | 15.13% | 12.87% |
VBTLX Vanguard Total Bond Market Index Fund Admiral Shares | 1.37% | -1.24% | 2.40% | 6.68% | -0.28% | 1.35% |
Monthly Returns
The table below presents the monthly returns of Two Fund Strategy, with color gradation from worst to best to easily spot seasonal factors. Returns are adjusted for dividends.
| Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | Total | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2024 | 0.71% | 3.38% | 2.53% | -3.82% | 3.81% | 2.49% | 1.98% | 1.92% | 1.83% | -1.26% | 18.29% | ||
| 2023 | 5.78% | -2.39% | 2.61% | 0.90% | -0.03% | 4.71% | 2.49% | -1.54% | -4.11% | -2.31% | 7.90% | 4.85% | 19.69% |
| 2022 | -4.87% | -2.11% | 1.34% | -7.44% | 0.00% | -6.23% | 7.25% | -3.45% | -7.79% | 5.28% | 4.80% | -4.38% | -17.50% |
| 2021 | -0.46% | 1.79% | 2.05% | 3.89% | 0.38% | 2.03% | 1.57% | 1.95% | -3.43% | 4.69% | -0.96% | 2.55% | 16.97% |
| 2020 | 0.58% | -5.16% | -9.56% | 9.75% | 4.02% | 1.81% | 4.44% | 4.81% | -2.58% | -1.69% | 8.86% | 3.20% | 18.10% |
| 2019 | 6.33% | 2.50% | 1.57% | 2.80% | -4.03% | 5.19% | 1.08% | -0.59% | 1.00% | 1.54% | 2.65% | 2.00% | 23.97% |
| 2018 | 3.39% | -2.94% | -1.22% | 0.02% | 2.17% | 0.49% | 2.36% | 2.60% | -0.04% | -5.39% | 1.59% | -5.82% | -3.27% |
| 2017 | 1.44% | 2.80% | 0.04% | 0.96% | 0.92% | 0.65% | 1.43% | 0.37% | 1.57% | 1.56% | 2.09% | 0.85% | 15.67% |
| 2016 | -3.50% | 0.18% | 5.09% | 0.57% | 1.25% | 0.75% | 2.97% | 0.15% | 0.08% | -1.79% | 2.32% | 1.46% | 9.66% |
| 2015 | -1.23% | 3.62% | -0.59% | 0.19% | 0.84% | -1.49% | 1.39% | -4.32% | -1.76% | 5.54% | 0.33% | -1.57% | 0.56% |
| 2014 | -1.71% | 3.43% | 0.32% | 0.28% | 1.84% | 1.84% | -1.46% | 3.26% | -1.69% | 2.20% | 1.90% | -0.03% | 10.47% |
| 2013 | 3.66% | 1.07% | 2.77% | 1.47% | 1.14% | -1.35% | 3.88% | -2.17% | 2.88% | 3.20% | 1.93% | 1.68% | 21.91% |
Expense Ratio
Two Fund Strategy has an expense ratio of 0.04%, which is considered low compared to other funds. Below you can find the expense ratios of portfolio funds side-by-side and effortlessly compare their relative costs.
Risk-Adjusted Performance
Risk-Adjusted Performance Rank
The current risk-adjusted rank of Two Fund Strategy is 76, placing it in the top 24% of portfolios on our website in terms of risk-adjusted performance. This ranking is based on the combined values of the indicators listed below.
Risk-Adjusted Performance Indicators
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 ratio | Sortino ratio | Omega ratio | Calmar ratio | Martin ratio | |
|---|---|---|---|---|---|
VTSAX Vanguard Total Stock Market Index Fund Admiral Shares | 3.03 | 4.04 | 1.56 | 4.46 | 19.58 |
VBTLX Vanguard Total Bond Market Index Fund Admiral Shares | 1.36 | 2.02 | 1.24 | 0.51 | 4.66 |
Dividends
Dividend yield
Two Fund Strategy provided a 1.96% dividend yield over the last twelve months.
| TTM | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | 2013 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Portfolio | 1.96% | 1.93% | 1.91% | 1.41% | 1.66% | 2.06% | 2.26% | 1.95% | 2.09% | 2.13% | 2.00% | 1.99% |
| Portfolio components: | ||||||||||||
VTSAX Vanguard Total Stock Market Index Fund Admiral Shares | 1.25% | 1.43% | 1.65% | 1.20% | 1.41% | 1.77% | 2.04% | 1.71% | 1.92% | 1.98% | 1.76% | 1.74% |
VBTLX Vanguard Total Bond Market Index Fund Admiral Shares | 3.61% | 3.11% | 2.51% | 1.90% | 2.23% | 2.74% | 2.78% | 2.51% | 2.49% | 2.48% | 2.55% | 2.56% |
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.
Worst Drawdowns
The table below displays the maximum drawdowns of the Two Fund Strategy. 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 Two Fund Strategy was 40.77%, occurring on Mar 9, 2009. Recovery took 452 trading sessions.
The current Two Fund Strategy drawdown is 0.45%.
Depth | Start | To Bottom | Bottom | To Recover | End | Total |
|---|---|---|---|---|---|---|
| -40.77% | Oct 10, 2007 | 355 | Mar 9, 2009 | 452 | Dec 21, 2010 | 807 |
| -25.02% | Feb 20, 2020 | 23 | Mar 23, 2020 | 84 | Jul 22, 2020 | 107 |
| -22.88% | Mar 20, 2002 | 142 | Oct 9, 2002 | 277 | Nov 13, 2003 | 419 |
| -22.46% | Dec 28, 2021 | 202 | Oct 14, 2022 | 322 | Jan 29, 2024 | 524 |
| -13.71% | Sep 21, 2018 | 65 | Dec 24, 2018 | 59 | Mar 21, 2019 | 124 |
Volatility
Volatility Chart
The current Two Fund Strategy volatility is 2.76%, 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.
Diversification
Asset Correlations Table
| VBTLX | VTSAX | |
|---|---|---|
| VBTLX | 1.00 | -0.21 |
| VTSAX | -0.21 | 1.00 |