Build John Bogle’s Portfolio With ETFs

What is John Bogle’s portfolio?

The John Bogle portfolio can be built with just 2 ETFs. It is composed of a 60% Total Stock Market ETF and a 40% Total Bond Market ETF.

How do you build John Bogle’s portfolio with ETFs?

Here is how you build John Bogle’s portfolio with ETFs.

• 60.00% US Total Stock Market (VTI)
• 40.00% Total US Bond Market (BND)

The letters in brackets denote the stock symbol for the recommended ETF. You can look up the symbols at your stockbroker. You can see a listing of all the ETFs we recommend on this page.

What is the historical return of Jack Bogle’s portfolio?

Below you can see the historical returns of Jack Bogle’s Portfolio.

Portfolio data was last updated on 11th of August 2023, 08:35 ET

Performance for John Bogle’s portfolio

Name	Year to date	Return in 2022	10 year return	CAGR since 1989 (%)	Draw Down	Expense ratio	Yield
The Jack Bogle Portfolio	9.54	-16.95	7.82	8.57	-20.13	0.03%	1.98
Bogle Tax Sheltered	7.61	-14.07	6.07	7.64	-14.24	0.05%	2.3
The Rip Van Winkle Portfolio John Bogle Tax Sheltered	7.46	-14.87	6.06	7.6	-17.38	0.05%	2.54

Here is what the table is showing you

Year to date: This shows what the portfolio has returned this year starting from the first trading day of the year.

10 Year return: This shows the compounded annualized growth rate over a ten-year period. The current year is excluded from calculations.

CAGR since 1989: This shows the compounded annualized growth rate since 1989. The current year is excluded from calculations.

Expense ratio: This shows the cost of holding the portfolio if you were to construct the portfolio using the proposed ETFs.

Yield: This is the expected dividend yield of the portfolio.

Please note that past performance is not a guarantee of future returns.

How does John Bogle’s portfolios compare to the best portfolios?

Below you can see the returns of the best portfolios that we have benchmarked.

The 10 Best Performing Portfolios That We Have Benchmarked

Name	See Portfolio	Year to date	Return in 2022	10 year return	CAGR since 1989 (%)	Draw Down
Ben Stein Retirement	Coming soon!	4.05	-18.03	9.46	10.8	-35.42
Paul Merriman 4-Fund-Portfolio	Coming soon!	9.22	-11.98	11.25	10.38	-35.26
S&P 500	Coming soon!	17.09	-18.19	12.52	10.28	-37.63
Paul Merriman Target Date Portfolio (25 year old)	Coming soon!	6.63	-13.08	8.28	10.2	-36.46
Scott Adams Dilbert Portfolio	Coming soon!	10.87	-18.75	7.0	10.19	-44.88
JL Collins, Simple Path To Wealth, Wealth Building Portfolio	Coming soon!	16.6	-19.51	12.08	10.19	-37.0
American Institute of Individual Investors (AAII) Portfolio	Coming soon!	3.74	-13.91	9.7	10.16	-40.85
Paul Merriman Target Date Portfolio (35 year old)	Coming soon!	6.57	-13.22	8.31	10.08	-36.35
Assetbuilder.com Portfolio 14	Coming soon!	6.95	-16.94	7.59	9.99	-37.91
Balanced Portfolio 90/10	Coming soon!	14.83	-18.87	11.03	9.84	-32.78

Who Is John C. Bogle?

John Bogle was an American investor, entrepreneur, and philanthropist who was best known for founding The Vanguard Group, one of the world’s largest investment management companies. He is often referred to as the “father of index investing” due to his pioneering work in creating the first index mutual fund and promoting the benefits of passive investing.

Bogle was born in 1929 in New Jersey and graduated from Princeton University in 1951. He began his career in the investment industry in the 1950s, working for a variety of firms before founding The Vanguard Group in 1974. Bogle’s vision for Vanguard was to create a company that would be owned by its clients and operated in their best interests, with a focus on low fees and passive investing.

One of Bogle’s most significant contributions to the investment industry was his creation of the first index mutual fund, the Vanguard 500 Index Fund, which was launched in 1976. The fund was designed to track the performance of the S&P 500 index and provided investors with a low-cost, low-maintenance way to gain exposure to the broad stock market.

Bogle was also a vocal advocate for individual investors and an outspoken critic of the financial industry’s focus on short-term gains and high fees.

Bogle passed away in 2019 at the age of 89, leaving behind a legacy of innovation and advocacy for individual investors.

Vanguard is the only true mutual fund company because the mutual fund investors own Vanguard.

What is so unique about Vanguard’s ownership structure?

Vanguard has a unique governance structure that makes it so that Vanguard’s only mission is to look out for those who own shares of the mutual funds.

John Bogle has structured Vanguard in such a way that the owners of shares are also the owners of Vanguard. The investors (owners) are all those people who own a Vanguard mutual fund or ETF.

John Bogle calls it the only mutual mutual fund company. So in essence when you own an ETF or a mutual fund from Vanguard you also own a slice of Vanguard!

“Owning the stock market over the Long-Term is a winner’s game, but attempting to beat the market is a loser’s game.”

– John Bogle, Common Sense on Mutual Funds

This was a stroke of genius by John Bogle.

 

John Bogle had a lot to say about investing. One of his best books is John Bogle – Common Sense on Mutual Funds, where he dispenses most of his investing knowledge.

What are the the ten rules of John Bogle?

Here are the ten rules of John Bogle’s investing wisdom that is often cited:

1. Remember reversion to the mean.
2. Time is your friend. Start early, stick to a plan. Let the miracle of compound interest work for you.
3. Buy right and hold tight. Once you set your asset allocation, ignore moves in the market. Stick to the plan.
4. Have realistic expectations. Rates of return in the coming decade are likely to be lower than the last. A seven percent annual return before costs and inflation for stocks and a 2.5 percent return for bonds before costs and inflation is reasonable.
5. Forget the needle, buy the haystack. Don’t waste time buying individual stocks or stock funds. Cut your risk by purchasing broad-based index or exchange-traded funds.
6. Minimize the “croupier’s” take. Minimize fees by investing in low-cost, low turnover funds. This increases your return.
7. There’s no escaping risk. There’s no wealth without risk. If you don’t save, you’ll end up with nothing. And if you don’t invest for your retirement, your savings will be depleted by inflation.
8. Don’t fight the last war. What worked in the past is no predictor of what will work in the future. The past is not prologue.
9. The hedgehog beats the fox. Foxes are sly and represent financial institutions that sell complicated products and charge high fees for advice. A hedgehog does one thing when threatened — he curls up into a spiny ball. Simple, but effective, like an index fund.
10. Stay the course.The secret to successful investing isn’t forecasting or good stock picking. It is about making a plan, sticking to it, eliminating unnecessary risks, and keeping your costs low.

The last rule Stay the Course is the most famous of the rules. It has connotations to sailing through a storm or ignoring everyone else because you know you are doing the right thing. This is exactly what Vanguard and John Bogle has done.

John Bogle named Vanguard after Horatio Nelson’s flagship at the Battle of the Nile, HMS Vanguard.

Below you can see the real H.M.S Vanguard.

“Buying funds based purely on their past performance is one of the stupidest things an investor can do.”

– John Bogle,John Bogle – Common Sense on Mutual Funds

John Bogle died in 2019 at the age of 89. To fully grasp the magnitude of how he has helped not only investors but everyone in society we recommend that you read our article Who Are The 3 Good Guys In Investing?.

The article digs into the numbers on how much money Vanguard mutual funds have saved investors. The savings will continue long into the future.

The legacy and genius of John Bogle still live.

Let’s take a look at what John Bogle recommended for your portfolios. Let’s look at John Bogle’s asset allocation.

Description of John Bogle’s portfolio

John Bogle, the founder of Vanguard Group, did not have a single specific portfolio that he advocated for all investors. Instead, he believed in the power of low-cost index funds and the importance of diversification through broad market exposure.

In general, Bogle believed that a simple, diversified portfolio of low-cost index funds was the best approach for most investors. He often recommended a “core-satellite” approach, where the core of the portfolio was made up of a total stock market index fund and a total bond market index fund, while satellite holdings were used to add additional diversification or to tilt the portfolio towards specific sectors or asset classes.

Bogle also believed that investors should focus on their long-term investment goals and avoid making emotional decisions based on short-term market fluctuations. He emphasized the importance of staying invested and maintaining a consistent investment strategy, rather than trying to time the market or make frequent changes to the portfolio.

Overall, Bogle’s investment philosophy centered around the idea of keeping costs low, diversifying broadly, and staying invested for the long-term. While he did not recommend a specific portfolio for all investors, his principles have helped guide many investors towards successful long-term investing.

John Bogle does however mention some general guidelines.

“I recommended—as a crude starting point—that an investor’s bond position should equal his or her age.”

– John Bogle,Common Sense on Mutual Funds

He leaves room for the investor’s objectives and risk tolerance.

“My favorite rule of thumb is (roughly) to hold a bond position equal to your age—20 percent when you are 20, 70 percent when you’re 70, and so on—or maybe even your age minus 10 percent. There are no hard-and-fast rules here. (Most experts think my guidelines are too conservative. But I am conservative.)”

– John Bogle, The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns

John Bogle is probably more conservative than other investment gurus, at least in the accumulation (savings) phase. See below how that changes in the spending phase.

Which two asset classes does John Bogle recommend holding?

John Bogle recommends holding these two asset classes:

• U.S. total stock market
• U.S. total bond market

The reason that he does not seek international exposure is that American companies derive much of their revenue from overseas companies, so this is diversification enough.

If you want international exposure John Bogle recommends allocating a maximum of 20% of your stock portfolio to international stocks.

“I reaffirm my rule of thumb recommendation: Limit international holdings to no more than one fifth of the equity portfolio.”

– John Bogle, Common Sense on Mutual Funds

In John Bogle’s book Common Sense on Mutual Funds (2008) he presents a clear recommendation of how to structure a portfolio.

As you can see he recommends that you at most allocate be 80% of your portfolio to stocks. I find it surprising however that the most conservative portfolio is a 50% stock and 50% bond portfolio. That is much more aggressive than many other retirement portfolios.

 

What is the asset allocation for Jack Bogle’s portfolios?

Below you can see how you build John Bogle’s portfolios

• 60.00% US Total Stock Market (VTI)
• 40.00% Total US Bond Market (BND)

John Bogle’s Tax-Sheltered portfolios

• 40.00% US Total Stock Market (VTI)
• 10.00% International Developed (VEA)
• 30.00% Intermediate-Term Treasuries (VGIT)
• 10.00% TIPS (VTIP)
• 10.00% International Bonds (BNDX)

The Rip Van Winkle Portfolio John Bogle Tax-Sheltered

40.00% Total International (VEU) 10.00% International Developed (VEA) 30.00% US Total Bond Market (BND) 10.00% TIPS (VTIP) 10.00% International Bonds (BNDX)

Resources for Jack Bogle’s portfolio

There are a TON of resources on John Bogle. Do a quick Google search if you require more knowledge about the investing apogee.

Barry Ritholtz interview with Jack Bogle on the Bloomberg podcast Master of Business

The bogleheads forum is a great plave to find like-minded souls that adhere to the Bogle way of investing.

What are the best books by John Bogle?

The best books by John Bogle are:

1. John Bogle – Common Sense on Mutual Funds

In the book, Bogle provides an in-depth analysis of the mutual fund industry and offers his perspective on how investors can navigate this complex and often confusing landscape. He argues that mutual funds can be a powerful tool for individual investors, but only if they are used wisely and with a full understanding of their costs and risks.

Bogle emphasizes the importance of low costs, diversification, and a long-term investment approach. He discusses the benefits of index funds and highlights the flaws of actively managed funds, which he argues often fail to outperform the market and are burdened with high fees and turnover.

The book also covers a range of other topics related to mutual funds, including the importance of asset allocation, the role of taxes in investing, and the impact of market timing and performance chasing. Throughout the book, Bogle’s central message is that investors can achieve success in the market by following common sense principles and focusing on the fundamentals of investing.

Overall, “Common Sense on Mutual Funds” is a comprehensive guide to mutual fund investing, written by one of the most respected voices in the industry. It provides a wealth of information and insights for both novice and experienced investors and is a must-read for anyone looking to build a successful investment portfolio.

2. The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns

In the book, Bogle advocates for a simple, low-cost, and passive approach to investing, centered around index funds. He argues that individual investors can achieve superior long-term investment returns by owning a diversified portfolio of low-cost index funds that track the broad stock and bond markets.

Bogle discusses the history of index funds, their advantages over actively managed funds, and the importance of minimizing investment costs, taxes, and market timing. He also debunks a number of common myths about investing, such as the belief that individual investors can beat the market through active stock picking and market timing.

Overall, “The Little Book of Common Sense Investing” is a concise and accessible guide to long-term investing, written in Bogle’s trademark style of plain-spoken wisdom and practical advice. The book has been praised for its simplicity, clarity, and timeless insights, and has helped millions of investors around the world achieve their financial goals.

Suggestions for your next steps

If you have already committed to a portfolio then maybe you need help maintaining the portfolio. In this case you will find our rebalance worksheet useful.

Rebalancing your portfolio lowers your risk and may provide higher returns in the long run. It is completely FREE.

You can find the rebalance worksheet in our article Here Is The Most Easy To Use Portfolio Rebalance Tool.

Related questions

What is the 3 fund portfolio?

The 3-fund portfolio holds 3 ETFs. The 3 ETFs are:

• Total US Stock Market (VTI)
• Total International Stock Market (VEU / VEA)
• Total US Bond Market (BND)

What Vanguard funds does Warren Buffett recommend?

Buffett recommends the Vanguard S&P 500 (VOO) and the Vanguard Short-Term Treasury ETF (VGSH).

Which is the best Vanguard ETF?

The best overall Vanguard ETF is (VTI). The best Vanguard fund is Vanguard’s Healthcare Fund (VGHCX).