Managing the US Stocks/Bonds 20/80 To GBP Hedged Portfolio with a yearly rebalancing, you would have obtained a 9.66% compound annual return in the last 30 Years.
With a quarterly rebalancing, over the same period, the return would have been 5.66%.
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.
At fixed time intervals:
- Yearly: Jan 1st
- Half Yearly: Jan 1st, Jul 1st
- Quarterly: Jan 1st, Apr 1st, Jul 1st, Oct 1st
Portfolio Returns as of Aug 31, 2025
Implementing different rebalancing strategies, the US Stocks/Bonds 20/80 To GBP Hedged Portfolio guaranteed the following returns.
Portfolio returns are calculated in GBP, 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.
| Return (%) and number of rebalances as of Aug 31, 2025 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Rebalancing Strategy | 1Y | 5Y | 10Y | 30Y |
MAX (~76Y) |
|||||
| No Rebalancing | 16.21 | (0) | 11.83 | (0) | 11.53 | (0) | 9.66 | (0) | 10.43 | (0) |
| Yearly Rebalancing | 5.25 | (1) | 1.49 | (5) | 3.19 | (10) | 5.75 | (30) | 7.95 | (76) |
| Half Yearly Rebalancing | 5.02 | (2) | 1.41 | (10) | 3.15 | (20) | 5.66 | (60) | 7.91 | (152) |
| Quarterly Rebalancing | 5.18 | (4) | 1.36 | (20) | 3.20 | (40) | 5.73 | (120) | 7.91 | (303) |
| 5% Tolerance per asset | 5.19 | (0) | 1.54 | (2) | 3.24 | (3) | 5.77 | (10) | 7.99 | (25) |
| 10% Tolerance per asset | 5.96 | (0) | 1.92 | (1) | 3.55 | (2) | 5.75 | (3) | 7.97 | (7) |
In order to have complete information about the portfolio, please refer to the US Stocks/Bonds 20/80 To GBP Hedged Portfolio: ETF allocation and returns page.
Performances as of Aug 31, 2025
Historical returns and stats of US Stocks/Bonds 20/80 To GBP Hedged Portfolio, after implementing different rebalancing strategies.
|
Standard Deviation
|
Max Drawdown (%)
|
|||||
|---|---|---|---|---|---|---|
| Rebalancing Strategy | Return % | Std Dev(%) | Ret. / Std Dev | MaxDD(%) | Ret. / MaxDD | |
| No Rebalancing | 10.43 | (0) | 11.10 | 0.94 | -40.64 | 0.26 |
| Yearly Rebalancing | 7.95 | (76) | 5.67 | 1.40 | -17.13 | 0.46 |
| Half Yearly Rebalancing | 7.91 | (152) | 5.66 | 1.40 | -16.98 | 0.47 |
| Quarterly Rebalancing | 7.91 | (303) | 5.67 | 1.40 | -16.98 | 0.47 |
| 5% Tolerance per asset | 7.99 | (25) | 5.69 | 1.40 | -17.21 | 0.46 |
| 10% Tolerance per asset | 7.97 | (7) | 5.81 | 1.37 | -17.20 | 0.46 |
Drawdowns as of Aug 31, 2025
Historical Drawdowns of US Stocks/Bonds 20/80 To GBP Hedged Portfolio, after implementing different rebalancing strategies.
|
Rebalancing
|
Tolerance per asset
|
||||
|---|---|---|---|---|---|
| No Rebalancing | Yearly | Half Yearly | Quarterly | 5% | 10% |
|
-40.64
Nov 2007 - Feb 2011
|
-17.13
Jan 2022 - Jun 2025
|
-16.98
Sep 2021 - Jul 2025
|
-16.98
Sep 2021 - Jul 2025
|
-17.21
Jan 2022 - Jun 2025
|
-17.20
Sep 2021 - Jun 2025
|
|
-34.18
Sep 2000 - Dec 2004
|
-8.88
Sep 1968 - Nov 1970
|
-8.90
Sep 1968 - Nov 1970
|
-9.06
Sep 1968 - Nov 1970
|
-8.46
Dec 1968 - Nov 1970
|
-10.75
Dec 1968 - Nov 1970
|
|
-28.80
Jan 1973 - Jan 1976
|
-7.23
Mar 1974 - Jan 1975
|
-7.59
Nov 1973 - Jan 1975
|
-7.88
May 2008 - Jul 2009
|
-7.05
Feb 1980 - Apr 1980
|
-9.17
Nov 1973 - Feb 1975
|
|
-24.00
Jan 2022 - Feb 2024
|
-7.18
May 2008 - May 2009
|
-7.58
May 2008 - Jun 2009
|
-7.49
Nov 1973 - Jan 1975
|
-7.01
Mar 1974 - Jan 1975
|
-8.18
May 2008 - Jul 2009
|
|
-21.63
Sep 1987 - Jan 1989
|
-7.03
Jan 1981 - Nov 1981
|
-7.03
Jan 1981 - Nov 1981
|
-7.09
Aug 1980 - Nov 1981
|
-6.99
May 2008 - Jun 2009
|
-7.47
Aug 1980 - Nov 1981
|
| 5 Worst Drawdowns - Average | |||||
| -29.85 | -9.49 | -9.62 | -9.70 | -9.34 | -10.56 |
| 10 Worst Drawdowns - Average | |||||
| -23.02 | -7.85 | -7.85 | -7.78 | -7.72 | -8.25 |
For a deeper insight, please refer to the US Stocks/Bonds 20/80 To GBP Hedged Portfolio: ETF allocation and returns page.
