Betterment Robo Advisor 10 Portfolio: Rebalancing Strategy

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

Managing the Betterment Robo Advisor 10 Portfolio with a yearly rebalancing, you would have obtained a 5.32% compound annual return in the last 30 Years.

With a quarterly rebalancing, over the same period, the return would have been 4.25%.

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 Sep 30, 2024

Implementing different rebalancing strategies, the Betterment Robo Advisor 10 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
BETTERMENT ROBO ADVISOR 10 PORTFOLIO RETURNS
Period: January 1985 - September 2024
Annualized Returns
Swipe left to see all data
Return (%) and number of rebalances as of Sep 30, 2024
Rebalancing Strategy 1Y 5Y 10Y 30Y MAX
(~40Y)
No Rebalancing 17.54 (0) 4.83 (0) 4.30 (0) 5.32 (0) 6.40 (0)
Yearly Rebalancing 9.74 (1) 2.21 (5) 2.25 (10) 4.30 (30) 5.60 (40)
Half Yearly Rebalancing 9.64 (2) 2.24 (10) 2.25 (20) 4.25 (60) 5.54 (80)
Quarterly Rebalancing 9.68 (4) 2.31 (20) 2.29 (40) 4.28 (120) 5.56 (159)
5% Tolerance per asset 9.94 (0) 2.34 (1) 2.33 (1) 4.25 (4) 5.58 (5)
10% Tolerance per asset 11.35 (0) 2.69 (0) 2.50 (0) 4.38 (2) 5.68 (2)

In order to have complete information about the portfolio, please refer to the Betterment Robo Advisor 10 Portfolio: ETF allocation and returns page.

Performances as of Sep 30, 2024

Historical returns and stats of Betterment Robo Advisor 10 Portfolio, after implementing different rebalancing strategies.

BETTERMENT ROBO ADVISOR 10 PORTFOLIO PERFORMANCES
Period: January 1985 - September 2024
Swipe left to see all data
Standard Deviation
Max Drawdown (%)
Rebalancing Strategy Return % Std Dev(%) Ret. / Std Dev MaxDD(%) Ret. / MaxDD
No Rebalancing 6.40 (0) 4.85 1.32 -15.28 0.42
Yearly Rebalancing 5.60 (40) 2.90 1.93 -8.91 0.63
Half Yearly Rebalancing 5.54 (80) 2.89 1.92 -9.05 0.61
Quarterly Rebalancing 5.56 (159) 2.90 1.92 -9.10 0.61
5% Tolerance per asset 5.58 (5) 3.04 1.84 -9.15 0.61
10% Tolerance per asset 5.68 (2) 3.29 1.73 -10.14 0.56
(*) Since Jan 1985 (~40 yrs) | Annualized Returns (and number of rebalances)

Drawdowns as of Sep 30, 2024

Historical Drawdowns of Betterment Robo Advisor 10 Portfolio, after implementing different rebalancing strategies.

BETTERMENT ROBO ADVISOR 10 PORTFOLIO DRAWDOWNS
Period: January 1985 - September 2024
Swipe left to see all data
Rebalancing
Tolerance per asset
No Rebalancing Yearly Half Yearly Quarterly 5% 10%
-15.28
Jan 2022 - Mar 2024
-8.91
Sep 2021 - Jul 2024
-9.05
Sep 2021 - Jul 2024
-9.10
Sep 2021 - Jul 2024
-9.15
Sep 2021 - Jul 2024
-10.14
Sep 2021 - Jun 2024
-12.08
Jun 2008 - Nov 2009
-3.55
Apr 2008 - May 2009
-3.90
Apr 2008 - May 2009
-4.22
Apr 2008 - May 2009
-4.53
May 2008 - Jul 2009
-5.81
May 2008 - Jul 2009
-8.81
Jan 2020 - Jul 2020
-3.17
Feb 1994 - Feb 1995
-3.17
Feb 1994 - Feb 1995
-3.17
Feb 1994 - Feb 1995
-4.12
Feb 1994 - Apr 1995
-4.14
Feb 1994 - Apr 1995
-4.32
Jun 2011 - Jan 2012
-1.68
Apr 2004 - Sep 2004
-1.68
Apr 2004 - Sep 2004
-1.66
Apr 2004 - Sep 2004
-2.12
Feb 2020 - May 2020
-2.98
Aug 1990 - Nov 1990
-4.25
Feb 2018 - Mar 2019
-1.52
Aug 1990 - Oct 1990
-1.65
Aug 1990 - Oct 1990
-1.65
Aug 1990 - Oct 1990
-1.86
Apr 2004 - Sep 2004
-2.27
Jan 1990 - May 1990
5 Worst Drawdowns - Average
-8.95 -3.77 -3.89 -3.96 -4.36 -5.07
10 Worst Drawdowns - Average
-6.17 -2.54 -2.58 -2.62 -2.97 -3.54

For a deeper insight, please refer to the Betterment Robo Advisor 10 Portfolio: ETF allocation and returns page.