Merrill Lynch Edge Select Conservative Portfolio: Rebalancing Strategy

Data Source: from January 1985 to January 2024
Consolidated Returns as of 31 January 2024

Managing the Merrill Lynch Edge Select Conservative Portfolio with a yearly rebalancing, you would have obtained a 5.11% compound annual return in the last 30 Years.

With a quarterly rebalancing, over the same period, the return would have been 5.08%.

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 Jan 31, 2024

Implementing different rebalancing strategies, the Merrill Lynch Edge Select Conservative 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 USD, assuming:
  • No fees or capital gain taxes
  • the reinvestment of dividends, if existing
MERRILL LYNCH EDGE SELECT CONSERVATIVE PORTFOLIO RETURNS
Period: January 1985 - January 2024
Annualized Returns
Swipe left to see all data
Return (%) and number of rebalances as of Jan 31, 2024
Rebalancing Strategy 1Y 5Y 10Y 30Y MAX
(~39Y)
Yearly Rebalancing 5.76 (1) 3.37 (5) 3.43 (10) 5.11 (30) 6.64 (40)
Half Yearly Rebalancing 5.66 (2) 3.35 (10) 3.41 (20) 5.03 (60) 6.57 (79)
Quarterly Rebalancing 5.64 (4) 3.43 (20) 3.46 (40) 5.08 (120) 6.61 (157)
5% Tolerance per asset 5.63 (0) 3.67 (1) 3.68 (2) 5.16 (5) 6.70 (6)
10% Tolerance per asset 7.54 (0) 4.16 (0) 3.90 (1) 5.16 (2) 6.74 (2)

In order to have complete information about the portfolio, please refer to the Merrill Lynch Edge Select Conservative Portfolio: ETF allocation and returns page.

Performances as of Jan 31, 2024

Historical returns and stats of Merrill Lynch Edge Select Conservative Portfolio, after implementing different rebalancing strategies.

MERRILL LYNCH EDGE SELECT CONSERVATIVE PORTFOLIO PERFORMANCES
Period: January 1985 - January 2024
Swipe left to see all data
Standard Deviation
Max Drawdown (%)
Rebalancing Strategy Return % Std Dev(%) Ret. / Std Dev MaxDD(%) Ret. / MaxDD
Yearly Rebalancing 6.64 (40) 4.54 1.46 -12.44 0.53
Half Yearly Rebalancing 6.57 (79) 4.53 1.45 -12.63 0.52
Quarterly Rebalancing 6.61 (157) 4.56 1.45 -12.74 0.52
5% Tolerance per asset 6.70 (6) 4.73 1.41 -12.71 0.53
10% Tolerance per asset 6.74 (2) 5.30 1.27 -15.17 0.44
(*) Since Jan 1985 (~39 yrs) | Annualized Returns (and number of rebalances)

Drawdowns as of Jan 31, 2024

Historical Drawdowns of Merrill Lynch Edge Select Conservative Portfolio, after implementing different rebalancing strategies.

MERRILL LYNCH EDGE SELECT CONSERVATIVE PORTFOLIO DRAWDOWNS
Period: January 1985 - January 2024
Swipe left to see all data
Rebalancing
Tolerance per asset
Yearly Half Yearly Quarterly 5% 10%
-12.44
Jan 2022 - In progress
-12.63
Sep 2021 - In progress
-12.74
Sep 2021 - In progress
-12.71
Sep 2021 - In progress
-15.17
Jan 2022 - In progress
-10.97
May 2008 - Aug 2009
-11.60
May 2008 - Sep 2009
-12.04
May 2008 - Sep 2009
-12.03
Nov 2007 - Nov 2009
-14.70
Nov 2007 - Feb 2010
-5.44
Sep 1987 - Feb 1988
-4.57
Feb 2020 - Jun 2020
-4.57
Feb 2020 - May 2020
-5.85
Feb 2020 - Jul 2020
-6.57
Sep 1987 - Feb 1988
-4.57
Feb 2020 - Jun 2020
-4.47
Sep 1987 - Jan 1988
-4.22
Aug 1990 - Dec 1990
-4.88
Sep 1987 - Feb 1988
-6.15
Feb 2020 - Jul 2020
-4.06
Aug 1990 - Dec 1990
-4.22
Aug 1990 - Dec 1990
-4.07
Sep 1987 - Jan 1988
-4.52
Aug 1990 - Dec 1990
-6.12
Aug 1990 - Jan 1991
5 Worst Drawdowns - Average
-7.50 -7.50 -7.53 -8.00 -9.74
10 Worst Drawdowns - Average
-5.19 -5.16 -5.19 -5.70 -6.83

For a deeper insight, please refer to the Merrill Lynch Edge Select Conservative Portfolio: ETF allocation and returns page.