Rules of Bogle’s 50-50 PortfolioThe rules of Bogle’s 50-50 Portfolio is simple. This two funds portfolio invests its 50% allocation to U.S. stocks and 50% to bonds via index funds. It mainly invest in US stock only and US bond market only. This means he doesn’t invest in international stocks. Bogle also doesn’t invest in currency and other asset classes such as international stocks, and international bonds.
This portfolio is well like by Bogle followers in Bogleheads. Some people may consider this type of investment portfolio as moderate allocation portfolio.
How to InvestYou can invest in this Bogle’s 50-50 Portfolio through mutual funds or Exchange Traded Funds (ETFs). Below are the list. You can buy these investment funds through your brokerage.
Note: The performance may be slightly different due to expense fee, tracking error, active management funds, etc.
Vanguard Mutual Funds
- Vanguard Total Bond Market Index Fund Investor Shares (VBMFX)
- Vanguard Total Stock Market Index Fund Investor Shares (VTSMX)
Charles Schwab Mutual Funds
- Schwab Total Bond Market Fund (SWLBX)
- Schwab Total Stock Market Index Fund (SWTSX)
Fidelity Mutual Funds
- Fidelity US Bond Index Fund Investor (FBIDX)
- Fidelity Total Market Index Fund Investor (FSTMX)
Exchange Traded Funds (ETFs)
- Vanguard Total Bond Market ETF (BND)
- Vanguard Total Stock Market ETF (VTI)
Charles Schwab ETF
- Schwab US Broad Market ETF (SCHB)
- Schwab US Aggregate Bond ETF (SCHZ)
SPDR (State Street Global Advisors)
- SPDR Bloomberg Barclays Aggregate Bond ETF (BNDS)
- SPDR S&P 500 ETF (SPY)
- iShares Core S&P 500 ETF (IVV)
- iShares Core U.S. Aggregate Bond ETF (AGG)
Portfolio Performance overviewFor purpose of comparison I have used Vanguard ETFs (Exchange Traded Funds) portfolio to chart the fund's return.
This Bogle’s 50-50 Portfolio has returned 7.87 percent over the past decade, and 1.67 percent over the past five years. The past 5 years performance is as follows:
- Year 2016: 7.68%
- Year 2015: 0.46%
- Year 2014: 9.18%
- Year 2013: 15.68%
- Year 2012: 10.17%
|Year||100% Bond||100% Stock||70-30||50-50||30-70|
Stocks: Vanguard Total Stock Market ETF (VTI)
Pros and Cons of Bogle’s 50-50 PortfolioPros:
- The fund has lower risk than 100% stock funds.
- The investment portfolio has generate consistent returns for the past decade.
- The portfolio doesn’t invest in other asset classes: international stocks.
- It is not very diversify (debatable).