Managing the UK Stocks/Bonds 40/60 Portfolio with a yearly rebalancing, you would have obtained a 7.05% compound annual return in the last 30 Years.
With a quarterly rebalancing, over the same period, the return would have been 5.92%.
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 Jul 31, 2025
Implementing different rebalancing strategies, the UK Stocks/Bonds 40/60 Portfolio guaranteed the following returns.
Portfolio returns are calculated in GBP, assuming:
- No fees or capital gain taxes
- the reinvestment of dividends, if existing
| Return (%) and number of rebalances as of Jul 31, 2025 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Rebalancing Strategy | 1Y | 5Y | 10Y | 30Y |
MAX (~155Y) |
|||||
| No Rebalancing | 13.61 | (0) | 11.51 | (0) | 6.50 | (0) | 7.05 | (0) | 6.59 | (0) |
| Yearly Rebalancing | 5.57 | (1) | 1.56 | (5) | 2.85 | (10) | 5.97 | (30) | 6.08 | (155) |
| Half Yearly Rebalancing | 5.44 | (2) | 1.52 | (10) | 2.81 | (20) | 5.92 | (60) | 6.05 | (310) |
| Quarterly Rebalancing | 5.42 | (4) | 1.44 | (20) | 2.85 | (40) | 5.96 | (120) | 6.03 | (619) |
| 5% Tolerance per asset | 5.76 | (1) | 1.75 | (4) | 2.85 | (5) | 6.00 | (18) | 6.07 | (54) |
| 10% Tolerance per asset | 6.38 | (1) | 2.12 | (2) | 2.95 | (2) | 5.78 | (3) | 6.04 | (14) |
In order to have complete information about the portfolio, please refer to the UK Stocks/Bonds 40/60 Portfolio: ETF allocation and returns page.
Performances as of Jul 31, 2025
Historical returns and stats of UK Stocks/Bonds 40/60 Portfolio, after implementing different rebalancing strategies.
|
Standard Deviation
|
Max Drawdown (%)
|
|||||
|---|---|---|---|---|---|---|
| Rebalancing Strategy | Return % | Std Dev(%) | Ret. / Std Dev | MaxDD(%) | Ret. / MaxDD | |
| No Rebalancing | 6.59 | (0) | 10.04 | 0.66 | -59.45 | 0.11 |
| Yearly Rebalancing | 6.08 | (155) | 6.23 | 0.98 | -37.18 | 0.16 |
| Half Yearly Rebalancing | 6.05 | (310) | 6.19 | 0.98 | -38.22 | 0.16 |
| Quarterly Rebalancing | 6.03 | (619) | 6.19 | 0.97 | -38.89 | 0.15 |
| 5% Tolerance per asset | 6.07 | (54) | 6.19 | 0.98 | -38.34 | 0.16 |
| 10% Tolerance per asset | 6.04 | (14) | 6.20 | 0.97 | -38.19 | 0.16 |
Drawdowns as of Jul 31, 2025
Historical Drawdowns of UK Stocks/Bonds 40/60 Portfolio, after implementing different rebalancing strategies.
|
Rebalancing
|
Tolerance per asset
|
||||
|---|---|---|---|---|---|
| No Rebalancing | Yearly | Half Yearly | Quarterly | 5% | 10% |
|
-59.45
Sep 1972 - Feb 1976
|
-37.18
Jun 1972 - May 1975
|
-38.22
Jun 1972 - Jun 1975
|
-38.89
May 1972 - Sep 1975
|
-38.34
Jun 1972 - Sep 1975
|
-38.19
May 1972 - Sep 1975
|
|
-36.59
Nov 2007 - Feb 2011
|
-16.31
Jan 2022 - Jul 2025
|
-16.67
Dec 2021 - Jul 2025
|
-16.80
Dec 2021 - In progress
|
-16.39
Jan 2022 - Jul 2025
|
-15.86
Jan 2022 - May 2025
|
|
-36.37
Sep 2000 - Sep 2005
|
-15.05
Feb 1994 - Dec 1995
|
-15.05
Feb 1994 - Dec 1995
|
-15.05
Feb 1994 - Dec 1995
|
-15.23
Feb 1994 - Dec 1995
|
-15.04
Sep 1989 - Feb 1991
|
|
-29.90
Oct 1987 - Jul 1989
|
-14.75
Sep 1989 - Feb 1991
|
-14.49
Sep 1989 - Feb 1991
|
-14.44
Sep 1989 - Feb 1991
|
-14.78
Sep 1989 - Feb 1991
|
-14.63
Feb 1994 - Nov 1995
|
|
-24.07
Feb 1969 - Jun 1971
|
-13.06
Jun 1976 - Jan 1977
|
-13.17
Jun 1976 - Jan 1977
|
-13.27
Jun 1976 - Jan 1977
|
-13.35
Jun 1976 - Jan 1977
|
-14.03
Oct 1919 - Mar 1922
|
| 5 Worst Drawdowns - Average | |||||
| -37.28 | -19.27 | -19.52 | -19.69 | -19.62 | -19.55 |
| 10 Worst Drawdowns - Average | |||||
| -29.17 | -15.29 | -15.38 | -15.49 | -15.42 | -15.81 |
For a deeper insight, please refer to the UK Stocks/Bonds 40/60 Portfolio: ETF allocation and returns page.
