Bogleheads Three-Fund at a glance
Bogleheads Three-Fund is a fixed-allocation portfolio by Bogleheads / Taylor Larimore across US Equity, International Equity, US Bonds, rebalanced annual. Backtested 1987-12-31 to 2026-07-03 (38.5 years): 8.3% CAGR, 0.93 Sharpe, -36.7% max drawdown, 10.2% volatility.
- Type
- Fixed Allocation
- Author
- Bogleheads / Taylor Larimore
- Rebalancing
- Annual
- Risk
- Moderate
- Period
- 1987-12-31 to 2026-07-03
- CAGR
- 8.3%
- Sharpe
- 0.93
- Max Drawdown
- -36.7%
- Volatility
- 10.2%
Bogleheads Three-Fund — Fixed Allocation Portfolio
The Bogleheads Three-Fund Portfolio, championed by Taylor Larimore and the Bogleheads forum, captures the entire global stock market plus the US bond market in just three low-cost index funds: 40% US stocks (VTI), 20% international stocks (VXUS), and 40% bonds (BND).
Bogleheads Three-Fund: frequently asked questions
- What is Bogleheads Three-Fund?
- The most popular lazy portfolio: US stocks, international stocks, and US bonds. Simple, diversified, low-cost.
- Who created the Bogleheads Three-Fund strategy?
- Bogleheads Three-Fund was developed by Bogleheads / Taylor Larimore. It is based on Larimore, T. The Bogleheads' Guide to the Three-Fund Portfolio (2018).
- What is the historical return and maximum drawdown of Bogleheads Three-Fund?
- Backtested from 1987-12-31 to 2026-07-03, Bogleheads Three-Fund returned 8.3% CAGR with a -36.7% maximum drawdown and a Sharpe ratio of 0.93. Past performance does not guarantee future results.
- How often is Bogleheads Three-Fund rebalanced?
- Bogleheads Three-Fund is rebalanced annual. BestFolio publishes the updated allocation signal each period.
- Is Bogleheads Three-Fund a fixed or tactical strategy?
- Bogleheads Three-Fund is a fixed-allocation (strategic) portfolio: it holds a set allocation and rebalances on schedule rather than rotating based on market signals.
Backtest Performance (1987-12-31 to 2026-07-03)
| Metric | Bogleheads Three-Fund |
|---|---|
| Compound Annual Growth Rate (CAGR) | 8.3% |
| Maximum Drawdown | -36.7% |
| Sharpe Ratio | 0.93 |
| Sortino Ratio | 1.22 |
| Annualized Volatility | 10.2% |
| Calmar Ratio | 0.23 |
| Total Return | 2071.1% |
| Backtest Period | 38.5 years |
Strategy Details
- Type
- Fixed / Strategic
- Rebalancing
- annual
- Risk Level
- moderate
- Variants
- 2
- Author
- Bogleheads / Taylor Larimore
- Source
- Larimore, T. The Bogleheads' Guide to the Three-Fund Portfolio (2018)
Asset Classes
- US Equity
- International Equity
- US Bonds
Categories
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