Canada Stocks/Bonds 20/80 Portfolio: Rebalancing Strategy

Data Source: from January 1988 to October 2024
Consolidated Returns as of 31 October 2024

Managing the Canada Stocks/Bonds 20/80 Portfolio with a yearly rebalancing, you would have obtained a 5.35% compound annual return in the last 30 Years.

With a quarterly rebalancing, over the same period, the return would have been 5.39%.

How do returns and drawdowns change, implementing different rebalancing strategies?

Rebalancing Strategies

In order to keep risk under control, you should rebalance assets quotes from time to time, so to keep them at the original percentage of the asset allocation.

Rebalancing can be performed in several ways.

At fixed time intervals:
  • Yearly: Jan 1st
  • Half Yearly: Jan 1st, Jul 1st
  • Quarterly: Jan 1st, Apr 1st, Jul 1st, Oct 1st
When a component (at least one) diverges from its original weight beyond a certain threshold (e.g. 5% or 10%).

Portfolio Returns as of Oct 31, 2024

Implementing different rebalancing strategies, the Canada Stocks/Bonds 20/80 Portfolio guaranteed the following returns.

According to the available data source, we assume we built the portfolio on January 1988.

Portfolio returns are calculated in CAD, assuming:
  • No fees or capital gain taxes
  • the reinvestment of dividends, if existing
CANADA STOCKS/BONDS 20/80 PORTFOLIO RETURNS
Period: January 1988 - October 2024
Annualized Returns
Swipe left to see all data
Return (%) and number of rebalances as of Oct 31, 2024
Rebalancing Strategy 1Y 5Y 10Y 30Y MAX
(~37Y)
No Rebalancing 17.94 (0) 3.42 (0) 3.68 (0) 5.35 (0) 5.72 (0)
Yearly Rebalancing 15.61 (1) 2.60 (5) 3.30 (10) 5.40 (30) 5.77 (37)
Half Yearly Rebalancing 15.49 (2) 2.59 (10) 3.29 (20) 5.39 (60) 5.76 (74)
Quarterly Rebalancing 15.48 (4) 2.65 (20) 3.32 (40) 5.41 (120) 5.78 (148)
5% Tolerance per asset 15.95 (1) 2.71 (2) 3.31 (2) 5.41 (8) 5.79 (9)
10% Tolerance per asset 15.83 (0) 2.95 (1) 3.44 (1) 5.27 (1) 5.66 (1)

In order to have complete information about the portfolio, please refer to the Canada Stocks/Bonds 20/80 Portfolio: ETF allocation and returns page.

Performances as of Oct 31, 2024

Historical returns and stats of Canada Stocks/Bonds 20/80 Portfolio, after implementing different rebalancing strategies.

CANADA STOCKS/BONDS 20/80 PORTFOLIO PERFORMANCES
Period: January 1988 - October 2024
Swipe left to see all data
Standard Deviation
Max Drawdown (%)
Rebalancing Strategy Return % Std Dev(%) Ret. / Std Dev MaxDD(%) Ret. / MaxDD
No Rebalancing 5.72 (0) 5.61 1.02 -12.63 0.45
Yearly Rebalancing 5.77 (37) 5.51 1.05 -12.58 0.46
Half Yearly Rebalancing 5.76 (74) 5.49 1.05 -12.58 0.46
Quarterly Rebalancing 5.78 (148) 5.50 1.05 -12.54 0.46
5% Tolerance per asset 5.79 (9) 5.54 1.05 -12.56 0.46
10% Tolerance per asset 5.66 (1) 5.55 1.02 -12.63 0.45
(*) Since Jan 1988 (~37 yrs) | Annualized Returns (and number of rebalances)

Drawdowns as of Oct 31, 2024

Historical Drawdowns of Canada Stocks/Bonds 20/80 Portfolio, after implementing different rebalancing strategies.

CANADA STOCKS/BONDS 20/80 PORTFOLIO DRAWDOWNS
Period: January 1988 - October 2024
Swipe left to see all data
Rebalancing
Tolerance per asset
No Rebalancing Yearly Half Yearly Quarterly 5% 10%
-12.63
Feb 1994 - Nov 1995
-12.58
Feb 1994 - Nov 1995
-12.58
Feb 1994 - Nov 1995
-12.54
Feb 1994 - Nov 1995
-12.56
Feb 1994 - Nov 1995
-12.63
Feb 1994 - Nov 1995
-11.86
Jan 2022 - Jul 2024
-11.93
Jan 2022 - Aug 2024
-11.93
Jan 2022 - Aug 2024
-11.79
Jan 2022 - Jul 2024
-11.92
Jan 2022 - Jul 2024
-11.52
Jan 2022 - Jul 2024
-9.91
Jun 2008 - Aug 2009
-8.53
Jun 2008 - Jul 2009
-8.34
Jun 2008 - Jul 2009
-8.76
Jun 2008 - Jul 2009
-8.89
Jun 2008 - Jul 2009
-9.91
Jun 2008 - Aug 2009
-7.48
Feb 2020 - Jun 2020
-7.04
Jun 1998 - Jan 1999
-6.82
Jun 1998 - Dec 1998
-6.77
Jun 1998 - Dec 1998
-7.07
Feb 2020 - Jun 2020
-7.48
Feb 2020 - Jun 2020
-6.69
Jun 1998 - Dec 1998
-6.53
Feb 2020 - Jun 2020
-6.53
Feb 2020 - Jun 2020
-6.53
Feb 2020 - Jun 2020
-6.84
Jun 1998 - Dec 1998
-6.69
Jun 1998 - Dec 1998
5 Worst Drawdowns - Average
-9.71 -9.32 -9.24 -9.28 -9.46 -9.64
10 Worst Drawdowns - Average
-7.17 -6.86 -6.78 -6.80 -6.84 -7.13

For a deeper insight, please refer to the Canada Stocks/Bonds 20/80 Portfolio: ETF allocation and returns page.