The Three-Fund Portfolio
Three funds cover almost everything a long-term investor needs. The rest is preference.
At a glance
Figures checked 1 Sep 2026
Expense ratio
Typically under 0.07% blended
Minimum investment
One fractional share of each
Risk level
Set by the bond weight
What to take away
- Total US market, total international, total bond market. That is the whole design.
- Weights come from your horizon, not from anyone's forecast.
- Its advantage is being simple enough to maintain for thirty years.
| Stage | US stocks | International | Bonds |
|---|---|---|---|
| Early career | 55% | 35% | 10% |
| Mid-career | 50% | 30% | 20% |
| Approaching retirement | 40% | 20% | 40% |
| Retired | 30% | 15% | 55% |
Nothing here is optimised, and that is the point. The portfolio is diversified, cheap and requires one rebalancing decision a year. Complexity in a portfolio is a maintenance cost you pay every year for the rest of your life.
A single target-date fund achieves much the same thing with one holding. Choose three funds if you want control of the weights, one fund if you want none.
Common questions
They are optional tilts. Each adds a decision and a rebalancing obligation; none is required for a sound portfolio.