Stocks/Bonds 20/80 To EUR Hedged Portfolio: Rebalancing Strategy

Data Source: from January 1950 to November 2024
Consolidated Returns as of 30 November 2024

Managing the Stocks/Bonds 20/80 To EUR Hedged Portfolio with a yearly rebalancing, you would have obtained a 9.25% compound annual return in the last 30 Years.

With a quarterly rebalancing, over the same period, the return would have been 5.18%.

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 Stocks/Bonds 20/80 To EUR Hedged Portfolio guaranteed the following returns.

According to the available data source, we assume we built the portfolio on January 1950.

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.
STOCKS/BONDS 20/80 TO EUR HEDGED PORTFOLIO RETURNS
Period: January 1950 - 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
(~75Y)
No Rebalancing 30.56 (0) 11.89 (0) 9.97 (0) 9.25 (0) 8.79 (0)
Yearly Rebalancing 9.59 (1) 1.58 (5) 2.35 (10) 5.26 (30) 6.38 (75)
Half Yearly Rebalancing 9.35 (2) 1.54 (10) 2.32 (20) 5.18 (60) 6.34 (150)
Quarterly Rebalancing 9.26 (4) 1.55 (20) 2.34 (40) 5.23 (120) 6.33 (300)
5% Tolerance per asset 9.91 (1) 1.63 (2) 2.42 (4) 5.30 (11) 6.42 (25)
10% Tolerance per asset 10.37 (0) 1.98 (1) 2.64 (2) 5.27 (3) 6.39 (7)

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

Performances as of Nov 30, 2024

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

STOCKS/BONDS 20/80 TO EUR HEDGED PORTFOLIO PERFORMANCES
Period: January 1950 - 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 8.79 (0) 11.07 0.79 -41.15 0.21
Yearly Rebalancing 6.38 (75) 5.65 1.13 -17.50 0.36
Half Yearly Rebalancing 6.34 (150) 5.64 1.12 -17.41 0.36
Quarterly Rebalancing 6.33 (300) 5.64 1.12 -17.44 0.36
5% Tolerance per asset 6.42 (25) 5.67 1.13 -17.64 0.36
10% Tolerance per asset 6.39 (7) 5.78 1.10 -17.64 0.36
(*) Since Jan 1950 (~75 yrs) | Annualized Returns (and number of rebalances)

Drawdowns as of Nov 30, 2024

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

STOCKS/BONDS 20/80 TO EUR HEDGED PORTFOLIO DRAWDOWNS
Period: January 1950 - November 2024
Swipe left to see all data
Rebalancing
Tolerance per asset
No Rebalancing Yearly Half Yearly Quarterly 5% 10%
-41.15
Nov 2007 - Feb 2011
-17.50
Jan 2022 - In progress
-17.41
Sep 2021 - In progress
-17.44
Sep 2021 - In progress
-17.64
Sep 2021 - In progress
-17.64
Sep 2021 - In progress
-35.37
Apr 2000 - Jul 2005
-11.37
Aug 1980 - Nov 1981
-11.35
Aug 1980 - Nov 1981
-11.57
Aug 1980 - Nov 1981
-11.00
Sep 1979 - May 1980
-12.41
Sep 1968 - Nov 1970
-31.41
Jan 1973 - Jun 1976
-11.01
Sep 1968 - Nov 1970
-11.04
Sep 1968 - Nov 1970
-11.19
Sep 1968 - Nov 1970
-10.87
Aug 1980 - Nov 1981
-11.99
Jul 1980 - Aug 1982
-24.68
Jan 2022 - Feb 2024
-10.95
Sep 1979 - May 1980
-10.97
Sep 1979 - May 1980
-11.00
Sep 1979 - May 1980
-10.43
Sep 1968 - Nov 1970
-11.81
Jan 1973 - May 1975
-22.65
Dec 1968 - Jan 1971
-9.31
Nov 1973 - Feb 1975
-9.84
Nov 1973 - Feb 1975
-9.74
Nov 1973 - Feb 1975
-9.19
Nov 1973 - Feb 1975
-9.30
Sep 1979 - May 1980
5 Worst Drawdowns - Average
-31.05 -12.03 -12.12 -12.19 -11.82 -12.63
10 Worst Drawdowns - Average
-23.92 -9.34 -9.32 -9.37 -9.20 -9.77

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