Managing the US Stocks/Bonds 60/40 To GBP Portfolio with a yearly rebalancing, you would have obtained a 10.95% compound annual return in the last 30 Years.
With a quarterly rebalancing, over the same period, the return would have been 8.71%.
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 Jun 30, 2025
Implementing different rebalancing strategies, the US Stocks/Bonds 60/40 To GBP 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 adjustment for actual currency exchange rates (simulation derived from original US returns)
Return (%) and number of rebalances as of Jun 30, 2025 | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|
Rebalancing Strategy | 1Y | 5Y | 10Y | 30Y |
MAX (~155Y) |
|||||
No Rebalancing | 5.42 | (0) | 13.88 | (0) | 14.72 | (0) | 10.95 | (0) | 9.83 | (0) |
Yearly Rebalancing | 2.56 | (1) | 7.18 | (5) | 10.16 | (10) | 8.85 | (30) | 8.69 | (155) |
Half Yearly Rebalancing | 2.32 | (2) | 7.15 | (10) | 10.12 | (20) | 8.71 | (60) | 8.69 | (309) |
Quarterly Rebalancing | 2.56 | (4) | 7.07 | (20) | 10.20 | (40) | 8.81 | (120) | 8.71 | (618) |
5% Tolerance per asset | 2.34 | (1) | 7.20 | (3) | 10.17 | (5) | 8.84 | (20) | 8.69 | (91) |
10% Tolerance per asset | 2.47 | (0) | 7.73 | (2) | 10.44 | (2) | 9.04 | (8) | 8.78 | (30) |
In order to have complete information about the portfolio, please refer to the US Stocks/Bonds 60/40 To GBP Portfolio: ETF allocation and returns page.
Performances as of Jun 30, 2025
Historical returns and stats of US Stocks/Bonds 60/40 To GBP Portfolio, after implementing different rebalancing strategies.
Standard Deviation
|
Max Drawdown (%)
|
|||||
---|---|---|---|---|---|---|
Rebalancing Strategy | Return % | Std Dev(%) | Ret. / Std Dev | MaxDD(%) | Ret. / MaxDD | |
No Rebalancing | 9.83 | (0) | 15.54 | 0.63 | -75.07 | 0.13 |
Yearly Rebalancing | 8.69 | (155) | 11.22 | 0.77 | -51.47 | 0.17 |
Half Yearly Rebalancing | 8.69 | (309) | 11.32 | 0.77 | -51.33 | 0.17 |
Quarterly Rebalancing | 8.71 | (618) | 11.35 | 0.77 | -51.94 | 0.17 |
5% Tolerance per asset | 8.69 | (91) | 11.37 | 0.76 | -53.74 | 0.16 |
10% Tolerance per asset | 8.78 | (30) | 11.50 | 0.76 | -53.16 | 0.17 |
Drawdowns as of Jun 30, 2025
Historical Drawdowns of US Stocks/Bonds 60/40 To GBP Portfolio, after implementing different rebalancing strategies.
Rebalancing
|
Tolerance per asset
|
||||
---|---|---|---|---|---|
No Rebalancing | Yearly | Half Yearly | Quarterly | 5% | 10% |
-75.07
Sep 1929 - May 1943
|
-51.47
Sep 1929 - Jul 1936
|
-51.33
Sep 1929 - Feb 1936
|
-51.94
Sep 1929 - Jan 1936
|
-53.74
Sep 1929 - Jul 1936
|
-53.16
Sep 1929 - Jul 1936
|
-48.15
Sep 2000 - Dec 2010
|
-30.02
Mar 1937 - Dec 1938
|
-30.51
Mar 1937 - Feb 1939
|
-30.85
Mar 1937 - Dec 1938
|
-30.71
Mar 1937 - Dec 1938
|
-30.38
Mar 1937 - Oct 1938
|
-45.18
Jan 1973 - Jan 1976
|
-28.91
Sep 2000 - Aug 2008
|
-29.65
Sep 2000 - Dec 2008
|
-28.84
Sep 2000 - Aug 2008
|
-29.14
Sep 2000 - Dec 2008
|
-29.06
Jan 1973 - Jun 1975
|
-36.89
Sep 1987 - May 1989
|
-28.03
Aug 1987 - Apr 1989
|
-27.62
Jan 1973 - Jun 1975
|
-27.63
Jan 1973 - Jun 1975
|
-27.94
Jan 1973 - Jun 1975
|
-28.72
Sep 2000 - Dec 2008
|
-30.52
Sep 1989 - May 1991
|
-26.79
Jan 1973 - Jun 1975
|
-26.74
Aug 1987 - Apr 1989
|
-26.13
Aug 1987 - Apr 1989
|
-26.83
Aug 1987 - Apr 1989
|
-27.84
Aug 1987 - Apr 1989
|
5 Worst Drawdowns - Average | |||||
-47.16 | -33.04 | -33.17 | -33.08 | -33.67 | -33.83 |
10 Worst Drawdowns - Average | |||||
-36.14 | -26.61 | -26.69 | -26.68 | -26.93 | -27.38 |
For a deeper insight, please refer to the US Stocks/Bonds 60/40 To GBP Portfolio: ETF allocation and returns page.