ETF Model Portfolios: The Boglehead Couch Potato

75% in global stocks

You can tweak the allocation depending on your risk tolerance, but I think a 75% equity and 25% bond split sits in a reasonable middle ground for many investors.

On the equity side, the portfolio uses the Vanguard Total World Stock ETF

. This ETF tracks the FTSE Global All Cap Index and charges a 0.06% expense ratio. You’re getting exposure to more than 10,000 companies across U.S., developed international, and emerging markets in a single fund.

One of the advantages of market-cap weighting at this scale is that it naturally captures long-term winners. As companies grow and succeed, they take up a larger share of the index. That creates a built-in momentum effect without needing to actively rebalance into winners.

At the same time, the portfolio maintains a solid quality profile. You’re looking at an aggregate earnings growth rate of about 19.5% and an average return on equity of 18.2%. Valuations are also reasonable, with the ETF trading at roughly 20.31 times trailing earnings.

Geographically, the U.S. makes up about 60% of the portfolio, followed by developed markets like Japan, the United Kingdom, and Canada, then emerging markets such as China, Taiwan, and South Korea.

One drawback is tax efficiency. Because this ETF bundles U.S. and international stocks together, you can’t claim a foreign tax credit on withholding taxes. That makes it less efficient in taxable accounts compared to splitting exposures.

That said, the drag is manageable. Over the past 10 years, the ETF delivered an annualized 11.52% return before taxes, which drops to about 10.9% after distributions and 9.35% after selling shares. For a one-ticket global portfolio, that’s a reasonable trade-off.

25% in global bonds

Bogleheads tend to keep their asset allocation simple and shun alternatives. No commodities, no crypto, no hedge fund-like strategies. Just stocks and bonds.

For fixed income, the portfolio uses the Vanguard Total World Bond ETF

. It’s essentially the bond market equivalent of VT. For a 0.05% expense ratio, you get exposure to more than 18,000 bonds across U.S., developed, and emerging markets.

The portfolio has an intermediate duration of about 6.2 years, which is a measure of interest rate sensitivity. The average yield to maturity sits around 4.8%, though for income purposes, the more relevant figure is the 30-day SEC yield, currently around 4.2%.

One structural detail is that this ETF is actually a fund of funds. It holds two underlying Vanguard bond ETFs covering U.S. and international markets.

The international portion is currency hedged, which reduces the impact of exchange rate fluctuations. That means you’re getting global diversification without taking on additional currency risk.

Putting it together

This is about as simple as it gets. Allocate 75% to VT and 25% to BNDW, then rebalance once a year. Keeping turnover low helps minimize trading costs and potential tax consequences.

Over time, this portfolio will likely lag a 100% equity benchmark like the MSCI ACWI. That’s expected. You’re trading some upside for lower volatility and a smoother ride. However, it is extremely affordable with an weighted average expense ratio of 0.0575%.

What you get in return is broad exposure to global stocks and bonds in just two ETFs. Country weights, sector exposure, bond maturities, and credit quality are all highly diversified, as seen below.

If your goal is to match global market returns net of fees without overthinking it, this does the job. And for investors who prefer to keep things simple and spend their time elsewhere, that’s the whole point.

Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.