Scott Burns Couch Potato To EUR Hedged Portfolio: Rebalancing Strategy

Data Source: from January 1985 to November 2024
Consolidated Returns as of 30 November 2024

Managing the Scott Burns Couch Potato To EUR Hedged Portfolio with a yearly rebalancing, you would have obtained a 8.54% compound annual return in the last 30 Years.

With a quarterly rebalancing, over the same period, the return would have been 7.66%.

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 Nov 30, 2024

Implementing different rebalancing strategies, the Scott Burns Couch Potato To EUR Hedged Portfolio guaranteed the following returns.

According to the available data source, we assume we built the portfolio on January 1985.

Portfolio returns are calculated in EUR, assuming:
  • No fees or capital gain taxes
  • the reinvestment of dividends, if existing
  • the currency hedging (simulation taking into account the interest rate differentials of the countries). It is also assumed that hedged instruments have an additional expense ratio of 0.25% (yearly), compared to the US original instrument.
SCOTT BURNS COUCH POTATO TO EUR HEDGED PORTFOLIO RETURNS
Period: January 1985 - November 2024
Annualized Returns
Swipe left to see all data
Return (%) and number of rebalances as of Nov 30, 2024
Rebalancing Strategy 1Y 5Y 10Y 30Y MAX
(~40Y)
No Rebalancing 27.34 (0) 10.49 (0) 8.52 (0) 8.54 (0) 9.48 (0)
Yearly Rebalancing 18.22 (1) 6.86 (5) 5.86 (10) 7.81 (30) 8.93 (40)
Half Yearly Rebalancing 17.80 (2) 6.84 (10) 5.83 (20) 7.66 (60) 8.86 (80)
Quarterly Rebalancing 17.69 (4) 6.87 (20) 5.87 (40) 7.76 (120) 8.96 (160)
5% Tolerance per asset 18.26 (1) 6.85 (2) 5.89 (4) 7.73 (17) 8.91 (20)
10% Tolerance per asset 19.05 (1) 7.13 (2) 6.13 (3) 7.95 (8) 9.04 (8)

In order to have complete information about the portfolio, please refer to the Scott Burns Couch Potato To EUR Hedged Portfolio: ETF allocation and returns page.

Performances as of Nov 30, 2024

Historical returns and stats of Scott Burns Couch Potato To EUR Hedged Portfolio, after implementing different rebalancing strategies.

SCOTT BURNS COUCH POTATO TO EUR HEDGED PORTFOLIO PERFORMANCES
Period: January 1985 - November 2024
Swipe left to see all data
Standard Deviation
Max Drawdown (%)
Rebalancing Strategy Return % Std Dev(%) Ret. / Std Dev MaxDD(%) Ret. / MaxDD
No Rebalancing 9.48 (0) 10.48 0.91 -31.27 0.30
Yearly Rebalancing 8.93 (40) 8.92 1.00 -25.79 0.35
Half Yearly Rebalancing 8.86 (80) 8.86 1.00 -26.69 0.33
Quarterly Rebalancing 8.96 (160) 8.88 1.01 -27.18 0.33
5% Tolerance per asset 8.91 (20) 8.97 0.99 -26.94 0.33
10% Tolerance per asset 9.04 (8) 9.27 0.97 -26.38 0.34
(*) Since Jan 1985 (~40 yrs) | Annualized Returns (and number of rebalances)

Drawdowns as of Nov 30, 2024

Historical Drawdowns of Scott Burns Couch Potato To EUR Hedged Portfolio, after implementing different rebalancing strategies.

SCOTT BURNS COUCH POTATO TO EUR HEDGED PORTFOLIO DRAWDOWNS
Period: January 1985 - November 2024
Swipe left to see all data
Rebalancing
Tolerance per asset
No Rebalancing Yearly Half Yearly Quarterly 5% 10%
-31.27
Nov 2007 - Oct 2010
-25.79
Jun 2008 - Mar 2010
-26.69
Jun 2008 - Mar 2010
-27.18
Jun 2008 - Mar 2010
-26.94
Nov 2007 - Mar 2010
-26.38
Nov 2007 - Mar 2010
-23.32
Jan 2022 - Mar 2024
-19.97
Jan 2022 - Aug 2024
-19.89
Jan 2022 - Aug 2024
-19.96
Jan 2022 - Aug 2024
-20.34
Jan 2022 - Aug 2024
-20.48
Jan 2022 - Jul 2024
-22.54
Sep 2000 - Jan 2004
-16.55
Sep 1987 - Apr 1989
-14.58
Sep 1987 - Jan 1989
-13.65
Sep 1987 - Jan 1989
-14.89
Sep 1987 - Jan 1989
-16.61
Sep 1987 - Apr 1989
-16.61
Sep 1987 - Apr 1989
-10.01
Sep 2000 - May 2003
-11.54
Sep 2000 - May 2003
-10.88
Sep 2000 - May 2003
-10.96
Sep 2000 - May 2003
-11.02
Feb 2020 - Jul 2020
-14.50
Feb 2020 - Jul 2020
-9.44
Feb 2020 - Jul 2020
-9.44
Feb 2020 - Jul 2020
-9.44
Feb 2020 - Jun 2020
-9.88
Feb 2020 - Jul 2020
-10.26
Sep 2000 - May 2003
5 Worst Drawdowns - Average
-21.65 -16.35 -16.43 -16.22 -16.60 -16.95
10 Worst Drawdowns - Average
-15.53 -12.03 -12.00 -11.87 -12.24 -12.75

For a deeper insight, please refer to the Scott Burns Couch Potato To EUR Hedged Portfolio: ETF allocation and returns page.