The Classic 60-40 Portfolio by John Bogle is a simple and effective asset allocation that follows the stock and bond markets with only two inexpensive index funds.
Home Country
Portfolio Charts is able to translate portfolio information to the local currency, inflation, and available funds of many different countries. Choose the home country where you live, and it will update every section of the page.
Asset Allocation
How to build a Classic 60-40 Portfolio
| % | Asset Class |
|---|---|
| 60% | United States Large Cap Blend Stocks |
| 40% | United States Intermediate Term Treasury Bonds |
Author
John Bogle
John Bogle was the founder of Vanguard, the creator of the first index fund, and a true pioneer of index investing. You can read his thoughts on the Classic 60-40 portfolio in his book The Little Book of Common Sense Investing.
Overview
As the godfather of index investing, John Bogle spoke eloquently about the importance of avoiding market timing, diversifying your portfolio, minimizing fees, and staying the course. At a time when common investing advice involved individual stock picking, he went a different direction and not only promoted buying the entire market but also created the first index funds that made it possible for people to do so. The Classic 60-40 portfolio is his default asset allocation suggestion for pretty much every investor, and has been a staple of portfolio discussions ever since.
The Classic 60-40 consists of two funds — a simple stock market fund and an intermediate bond fund. The stocks are intended to drive returns, while the bonds are selected to reduce volatility and smooth out the ride. Bogle suggests that the percentage of stocks can be varied by the age of the investor, with young investors holding up to 80% and retirees holding as few as 50%. But he’s also a big fan of keeping it simple, and suggests that sticking with a 60-40 portfolio for life is really all you need.
One interesting note about the Classic 60-40 is that Bogle was never a fan of international markets because he believed that “the US is the most productive country in the world”. In fact, he chose to invest only in US funds with his own money. So while the concept can also be applied to other markets, it might rightfully be considered a US-centric portfolio philosophy.
Performance
Since 1970, an investor in the United States holding the Classic 60-40 Portfolio earned an average 5.9% real return, with a baseline CAGR of 3.4% over 15 years. It supported a 4.1% safe withdrawal rate for 30 years and 3.5% indefinitely. Its worst peak-to-trough loss was 36%, and the longest a new investment spent below water was under 14 years.
Classic 60-40 Portfolio Performance
| # | Metric | What it measures |
|---|---|---|
| 5.9% | Average return | Mean annual return after inflation |
| 3.4% | Baseline real return (15 years) | What 15-year stretches returned in the weaker outcomes |
| 4.1% | Safe withdrawal rate (30 years) | Highest spending rate that lasted 30 years in the worst case |
| 3.5% | Long-term withdrawal rate | The SWR floor over very long retirements |
| 36% | Deepest drawdown | Worst peak-to-trough loss after inflation |
| 14 years | Longest drawdown | Longest a new investment stayed below what you put in |
| 11.4% | Volatility (standard deviation) | Year-to-year variation in returns |
Stats for all home countries
Summary Stats by Home Country
| Home country | Average | Baseline | SWR | LTWR | Deepest | Longest | Volatility |
|---|---|---|---|---|---|---|---|
| Australia (aus) | 5.0% | 4.0% | 2.9% | 2.4% | 56% | 17 years | 13.3% |
| Canada (can) | 5.7% | 3.7% | 4.2% | 3.5% | 32% | 11 years | 10.3% |
| France (fra) | 6.3% | 3.6% | 4.1% | 3.3% | 34% | 15 years | 15.5% |
| Germany (deu) | 5.9% | 4.1% | 4.4% | 3.2% | 34% | 13 years | 14.9% |
| Italy (ita) | 4.9% | 1.1% | 2.2% | 1.7% | 70% | 24 years | 19.3% |
| Japan (jpn) | 5.3% | 0.9% | 3.1% | 2.1% | 46% | 25 years | 16.0% |
| Netherlands (nld) | 6.8% | 4.2% | 4.4% | 3.4% | 37% | 13 years | 14.0% |
| Spain (esp) | 5.0% | -0.2% | 1.8% | 1.5% | 76% | 26 years | 18.4% |
| Sweden (swe) | 8.4% | 5.6% | 4.8% | 4.3% | 36% | 12 years | 17.2% |
| Switzerland (che) | 5.4% | 3.4% | 3.8% | 3.2% | 40% | 14 years | 13.6% |
| United Kingdom (gbr) | 5.4% | 2.8% | 4.0% | 3.0% | 59% | 13 years | 15.0% |
| United States (usa) | 5.9% | 3.4% | 4.1% | 3.5% | 36% | 14 years | 11.4% |
To see this portfolio from a specific home country’s perspective, link readers to this page with ?home=COUNTRY added to the URL, using the codes shown in parentheses in the table above (e.g. ?home=aus). The portfolio itself is fixed by the page, so ?pk= has no effect here. More in the Guide for AI Assistants.
Charts
Different ways to visualize the Classic 60-40 Portfolio
Comparisons
How the Classic 60-40 Portfolio compares to other options
Alternatives
Portfolios with a similar structure or design intent
Three-Fund Portfolio — The same idea with 20% of the stocks dedicated to international
Total Stock Market — A broad domestic stock index fund without the bonds
Core Four Portfolio — Four simple index funds to own the market and minimize risk
Articles
Insights that mention the Classic 60-40 Portfolio
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