Three-Fund Portfolio
Apr 10, 2007 – Sep 23, 2026, Rebalanced annually
| Final balance | CAGR | Max drawdown | Sharpe ratio | |
|---|---|---|---|---|
| Three-Fund | $37,916 | 7.09% | −35.31% | 0.65 |
| S&P 500 | $75,807 | 10.97% | −55.19% | 0.63 |
| Three-Fund | S&P 500 | |
|---|---|---|
| Final balance | $37,916 | $75,807 |
| CAGR | 7.09% | 10.97% |
| Max drawdown | −35.31% | −55.19% |
| Sharpe ratio | 0.65 | 0.63 |
Allocation
- VTIUS total stock market42%
- VEUInternational stocks18%
- BNDUS total bond market40%
Loading the growth chart…
Growth of $10,000
- Three-Fund
- S&P 500
Metrics
| Return | Three-Fund | S&P 500 |
|---|---|---|
| Final balance | $37,916 | $75,807 |
| Total return | 279.16% | 658.07% |
| CAGR | 7.09% | 10.97% |
| Calendar years | Three-Fund | S&P 500 |
| Best year | 20.36% | 32.31% |
| Worst year | −20.61% | −36.80% |
| Positive years | 14 of 18 | 15 of 18 |
| Risk | Three-Fund | S&P 500 |
| Max drawdown | −35.31% | −55.19% |
| Longest drawdown | 2.9 years | 4.9 years |
| Volatility (annualized) | 11.58% | 19.64% |
| Risk-adjusted | Three-Fund | S&P 500 |
| Sharpe ratio | 0.65 | 0.63 |
| Sortino ratio | 0.91 | 0.89 |
| Calmar ratio | 0.20 | 0.20 |
| Return | Three-Fund | S&P 500 |
|---|---|---|
| Final balance | $37,916 | $75,807 |
| Total return | 279.16% | 658.07% |
| CAGR | 7.09% | 10.97% |
| Calendar years | Three-Fund | S&P 500 |
| Best year | 20.36% | 32.31% |
| Worst year | −20.61% | −36.80% |
| Positive years | 14 of 18 | 15 of 18 |
| Risk | Three-Fund | S&P 500 |
|---|---|---|
| Max drawdown | −35.31% | −55.19% |
| Longest drawdown | 2.9 years | 4.9 years |
| Volatility (annualized) | 11.58% | 19.64% |
| Risk-adjusted | Three-Fund | S&P 500 |
| Sharpe ratio | 0.65 | 0.63 |
| Sortino ratio | 0.91 | 0.89 |
| Calmar ratio | 0.20 | 0.20 |
Worst drawdowns
| Decline | Peak | Bottom | Recovered |
|---|---|---|---|
| −35.3% | Oct 2007 | Mar 2009 | Oct 2010 |
| −22.1% | Nov 2021 | Oct 2022 | Mar 2024 |
| −21.3% | Feb 2020 | Mar 2020 | Jul 2020 |
| −11.8% | Apr 2011 | Oct 2011 | Feb 2012 |
| −11.3% | Jan 2018 | Dec 2018 | Mar 2019 |
Annual returns
| Year | Three-Fund | S&P 500 |
|---|---|---|
| 2007* | +4.83% | +2.57% |
| 2008 | −20.61% | −36.80% |
| 2009 | +20.36% | +26.35% |
| 2010 | +11.93% | +15.06% |
| 2011 | +1.05% | +1.89% |
| 2012 | +11.49% | +15.99% |
| 2013 | +15.75% | +32.31% |
| 2014 | +6.78% | +13.46% |
| 2015 | −0.49% | +1.23% |
| 2016 | +7.27% | +12.00% |
| 2017 | +15.44% | +21.71% |
| 2018 | −4.70% | −4.57% |
| 2019 | +20.34% | +31.22% |
| 2020 | +13.94% | +18.33% |
| 2021 | +11.53% | +28.73% |
| 2022 | −16.25% | −18.18% |
| 2023 | +16.05% | +26.18% |
| 2024 | +11.55% | +24.89% |
| 2025 | +15.84% | +17.72% |
| 2026* | +7.67% | +13.47% |
* Partial year
About the Three-Fund Portfolio
The Three-Fund Portfolio comes from the Bogleheads, an investing community named after Vanguard founder John Bogle. It uses three index funds, one each for US stocks, international stocks and US bonds.
There's no fixed split. This page uses 42% US stocks, 18% international stocks and 40% bonds. That's 60% in stocks, with 30% of them abroad. VEU replaces the usual VXUS, which only started in 2011, so the backtest can include 2008.
The Three-Fund Portfolio returned 7.1% a year from Apr 2007 to Sep 2026, against 11.0% for the S&P 500. Its biggest drop was 35.3%, against 55.2% for the S&P 500. It took 2.9 years to recover. It beat the S&P 500 in 2 of 18 full years.
Uses daily closing prices with dividends reinvested. Fund fees are included, but not taxes or trading costs. The backtest starts on Apr 10, 2007, the first day all three funds have prices. The S&P 500 is SPY.
Other portfolios
Core Four
Rick Ferri's portfolio, 48% US stocks, 24% international stocks, 20% bonds, 8% real estate.
- VTI48%
- VEU24%
- VNQ8%
- BND20%
60/40
The standard balanced portfolio, 60% stocks, 40% bonds.
- VTI60%
- BND40%
Coffeehouse
Bill Schultheis' portfolio, 60% stocks in six equal slices, 40% bonds.
- VV10%
- VTV10%
- IJR10%
- IJS10%
- VEU10%
- VNQ10%
- BND40%