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Bogleheads Four Fund Portfolio
0.24%June 04 | MyPlanIQ portfolio symbol P_78934

  • Portfolio Overview
  • Asset Allocation and ETFs
  • Performance
  • Calculators
  • Rolling Returns
  • Drawdowns

Portfolio Overview


Bogleheads Four-Fund Portfolio Overview

1. Background and Philosophy

The Bogleheads Four-fund Portfolio is an extension of the widely recognized Bogleheads Three-fund Portfolio, which is rooted in the investment philosophy of John C. Bogle, the founder of Vanguard and a pioneer of passive index investing. The Bogleheads community, inspired by Bogle's principles, advocates for low-cost, diversified, and long-term investing strategies. The addition of international bonds in the Four-fund Portfolio further enhances diversification, aligning with the core Bogleheads tenets of simplicity, cost efficiency, and broad market exposure.

2. Asset Allocation, Diversification, and Risk

The portfolio is composed of four asset classes:

  • VTI (Vanguard Total Stock Market ETF, 50%): Provides exposure to the entire U.S. equity market, offering diversification across large-, mid-, and small-cap stocks.
  • VEA (Vanguard FTSE Developed Markets ETF, 30%): Covers international developed markets, complementing U.S. equities and reducing geographic concentration risk.
  • BND (Vanguard Total Bond Market ETF, 15%): Adds U.S. bond exposure for stability and income, mitigating equity volatility.
  • BNDX (Vanguard Total International Bond ETF, 5%): Introduces global bond diversification, hedging against U.S.-specific interest rate risks.

Diversification: The portfolio spans U.S. and international equities and bonds, reducing reliance on any single market or region. 

Risk Level: Moderate growth, with a 20% allocation to bonds providing downside protection while maintaining growth potential through equities. This is a growth-oriented portfolio. 

Pros:

  • Low-cost, passive ETFs minimize fees and turnover.
  • Broad diversification across asset classes and geographies.
  • Simple to manage and rebalance.

Cons:

  • No exposure to emerging markets (except indirectly through VTI's multinational holdings).
  • International bonds may introduce currency risk.
  • Higher equity allocation may not suit conservative investors.

3. Application for Retirement Accounts (401(k) and IRA)

Investors can replicate this portfolio in their 401(k) or IRA accounts by selecting mutual funds or other investment options that mirror the ETFs:

  • VTI: Look for a "U.S. Total Stock Market Index Fund" or an S&P 500 fund as a substitute.
  • VEA: Use an "International Developed Markets Index Fund" or a broader "Global ex-U.S. Fund."
  • BND: Choose a "U.S. Total Bond Market Index Fund" or intermediate-term bond fund or core bond funds.
  • BNDX: Opt for an "International Bond Index Fund" if available; otherwise, allocate to U.S. bonds.

Note: If a 401(k) lacks exact matches, prioritize higher-level asset classes (e.g., substitute missing international bonds with U.S. bonds). Avoid overcomplicating with non-core assets like commodities. 

Rule of Thumb: 

  • For stock funds, prioritize index funds, especially low-cost index funds
  • For bond funds, prioritize core bond funds or high-quality actively managed total return bond funds  (if available).
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Asset Allocation


Symbol Category/Sector Target Weight
BND
Vanguard Total Bond Market ETF 		Fixed Income 15%
BNDX
Vanguard Total International Bond ETF 		Fixed Income 5%
VEA
Vanguard FTSE Developed Markets ETF 		International Equity 30%
VTI
Vanguard Total Stock Market ETF 		US Equity 50%


Historical Performance


Bogleheads Four Fund Portfolio Historical Returns

Name YTD Return 1Yr AR 3Yr AR 5Yr AR 10Yr AR 15Yr AR 20Yr AR Inception
Bogleheads Four Fund Portfolio 6.04% 12.13% 10.74% 10.55% 8.50% NA NA 8.91%
VFINX (VANGUARD 500 INDEX FUND INVESTOR SHARES) 2.03% 14.20% 14.72% 15.60% 12.92% 14.19% 10.37% 13.36%
VSMGX (VANGUARD LIFESTRATEGY MODERATE GROWTH FUND INVESTOR SHARES) 5.23% 10.75% 8.37% 7.42% 6.31% 7.36% 6.07% 6.65%
Data as of 06/04/2025, AR inception is 06/04/2013

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Bogleheads Four Fund Portfolio Historical Return Chart


Calculators


Dollar Cost Average Calculator for Bogleheads Four Fund Portfolio

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Retirement Spending Calculator for Bogleheads Four Fund Portfolio

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Rolling Returns


From 06/04/2013 to 06/04/2025, the worst annualized return of 3-year rolling returns for Bogleheads Four Fund Portfolio is 2.34%.
From 06/04/2013 to 06/04/2025, the worst annualized return of 5-year rolling returns for Bogleheads Four Fund Portfolio is 3.49%.
From 06/04/2013 to 06/04/2025, the worst annualized return of 10-year rolling returns for Bogleheads Four Fund Portfolio is 6.57%.

Maximum Drawdown

Bogleheads Four Fund Portfolio Maximum Drawdown