Bogleheads Three Fund Portfolio
The Bogleheads Three-Fund Portfolio is arguably the most widely recommended passive portfolio among do-it-yourself investors. Developed and popularised by the Bogleheads community — a group of investors inspired by Vanguard founder John Bogle — it appears extensively on the Bogleheads wiki and in Taylor Larimore, Mel Lindauer, and Michael LeBoeuf's book The Bogleheads' Guide to Investing. The portfolio holds just three broad index funds: a US total stock market fund, an international total stock market fund, and a US bond market fund.
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Performance Snapshot
Rolling Returns
| Period | Low | Average | High |
|---|---|---|---|
| 1 Year | -36.6% | +9.8% | +45.2% |
| 3 Year | -10.6% | +8.8% | +24.4% |
| 5 Year | -2.8% | +8.7% | +21.0% |
| 10 Year | +0.3% | +7.8% | +14.6% |
Growth of $10,000
Historical Drawdown
Percentage decline from the portfolio's peak value at each point in time.
Rolling Returns
Annualised return for each rolling period ending on that date.
Annualised return for each 1Y period ending on that date.
Investment Philosophy
The three-fund portfolio is the practical expression of John Bogle's conviction that most investors are better served by owning the whole market at minimal cost than by attempting to select winning securities or time the market. The three funds provide complete diversification across thousands of stocks and bonds worldwide, and the simplicity of the structure makes it easy to maintain and nearly impossible to implement badly. The allocation between stocks and bonds is left to the individual investor, typically calibrated to age and risk tolerance.
Who It's For
This portfolio is appropriate for almost any long-term investor, from beginners just starting out to experienced investors who want a straightforward, evidence-based approach. It is particularly well suited to those who value simplicity, want to minimise investment costs, and are committed to holding through market downturns without tinkering.
Pros
- Exceptional simplicity — just three funds covering the entire investable stock and bond universe
- Very low cost when implemented with broad index funds
- Easy to rebalance and maintain over decades
Cons
- No exposure to factors such as value, size, or momentum that academic research suggests offer return premiums
- Heavy US home bias in the equity allocation is common among practitioners, which may not reflect global opportunity
- The bond fund's duration and credit quality may not be tailored to individual income or risk needs
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