Boglehead Portfolio

A boglehead portfolio invests in low-cost index funds with a long time horizon. The strategy with the strongest empirical evidence. Index Balance is the ideal tool to manage it.

Definition

A boglehead portfolio is an investment portfolio based on the principles of John C. Bogle, founder of Vanguard and creator of the first index fund for individual investors. The boglehead principles are: invest in low-cost index funds, broad diversification, long time horizon, minimal activity (buy and hold), and no market timing.

The boglehead philosophy has very solid empirical evidence: the simplicity of this strategy statistically outperforms most more complex strategies and most professional managers. Index Balance is designed specifically for this type of investor.

Typical European boglehead portfolios combine a global developed markets fund (MSCI World, 70-80%) with an emerging markets fund (MSCI Emerging Markets, 20-30%), though many variations exist depending on risk tolerance and whether bonds are included.

Practical example

A typical European boglehead portfolio: 80% iShares Dev World Index (IE) S Acc EUR (MSCI World, TER 0.12%) + 20% iShares EmergMkts Idx (IE) S Acc EUR (MSCI Emerging, TER 0.18%). Monthly contribution of €300 with annual rebalancing. This portfolio has a historical volatility of ~14% and a historical annualised return of ~8.5%.