Vanguard Conservative Income Portfolio: Rebalancing Strategy

Data Source: from January 1988 to September 2024
Consolidated Returns as of 30 September 2024

Managing the Vanguard Conservative Income Portfolio with a yearly rebalancing, you would have obtained a 6.11% compound annual return in the last 30 Years.

With a quarterly rebalancing, over the same period, the return would have been 5.52%.

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 Vanguard Conservative Income Portfolio guaranteed the following returns.

According to the available data source, we assume we built the portfolio on January 1988.

Portfolio returns are calculated in CAD, 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)
  • 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.
VANGUARD CONSERVATIVE INCOME PORTFOLIO RETURNS
Period: January 1988 - 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
(~37Y)
No Rebalancing 20.80 (0) 5.42 (0) 5.55 (0) 6.11 (0) 6.87 (0)
Yearly Rebalancing 14.87 (1) 2.32 (5) 3.53 (10) 5.56 (30) 6.35 (37)
Half Yearly Rebalancing 14.81 (2) 2.32 (10) 3.54 (20) 5.52 (60) 6.30 (74)
Quarterly Rebalancing 14.77 (4) 2.35 (20) 3.55 (40) 5.53 (120) 6.31 (147)
5% Tolerance per asset 15.81 (1) 2.72 (2) 3.78 (3) 5.60 (5) 6.43 (6)
10% Tolerance per asset 16.14 (1) 3.09 (1) 3.89 (1) 5.57 (2) 6.43 (2)

In order to have complete information about the portfolio, please refer to the Vanguard Conservative Income Portfolio: ETF allocation and returns page.

Performances as of Sep 30, 2024

Historical returns and stats of Vanguard Conservative Income Portfolio, after implementing different rebalancing strategies.

VANGUARD CONSERVATIVE INCOME PORTFOLIO PERFORMANCES
Period: January 1988 - 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 6.87 (0) 5.52 1.25 -14.96 0.46
Yearly Rebalancing 6.35 (37) 4.85 1.31 -13.67 0.46
Half Yearly Rebalancing 6.30 (74) 4.83 1.30 -13.63 0.46
Quarterly Rebalancing 6.31 (147) 4.84 1.30 -13.60 0.46
5% Tolerance per asset 6.43 (6) 4.95 1.30 -13.81 0.47
10% Tolerance per asset 6.43 (2) 4.99 1.29 -14.04 0.46
(*) Since Jan 1988 (~37 yrs) | Annualized Returns (and number of rebalances)

Drawdowns as of Sep 30, 2024

Historical Drawdowns of Vanguard Conservative Income Portfolio, after implementing different rebalancing strategies.

VANGUARD CONSERVATIVE INCOME PORTFOLIO DRAWDOWNS
Period: January 1988 - September 2024
Swipe left to see all data
Rebalancing
Tolerance per asset
No Rebalancing Yearly Half Yearly Quarterly 5% 10%
-14.96
Jan 2022 - Feb 2024
-13.67
Jan 2022 - Aug 2024
-13.63
Jan 2022 - Aug 2024
-13.60
Jan 2022 - Aug 2024
-13.81
Jan 2022 - Jul 2024
-14.04
Jan 2022 - Jul 2024
-10.10
Jun 2008 - Aug 2009
-9.25
Feb 1994 - May 1995
-9.25
Feb 1994 - May 1995
-9.29
Feb 1994 - May 1995
-9.39
Feb 1994 - Jun 1995
-9.61
Feb 1994 - Jul 1995
-9.61
Feb 1994 - Jul 1995
-7.62
Jun 2008 - Jul 2009
-7.69
Jun 2008 - Jul 2009
-7.95
Jun 2008 - Jul 2009
-8.08
Jun 2008 - Jul 2009
-8.05
Jun 2008 - Jul 2009
-7.52
Feb 2020 - Jun 2020
-5.04
Feb 2020 - May 2020
-5.04
Feb 2020 - May 2020
-5.04
Feb 2020 - May 2020
-5.89
Feb 2020 - May 2020
-5.72
Feb 2020 - May 2020
-5.02
Aug 1990 - Dec 1990
-4.44
Aug 1990 - Dec 1990
-4.60
Aug 1990 - Dec 1990
-4.60
Aug 1990 - Dec 1990
-5.02
Aug 1990 - Dec 1990
-5.02
Aug 1990 - Dec 1990
5 Worst Drawdowns - Average
-9.44 -8.00 -8.04 -8.10 -8.44 -8.49
10 Worst Drawdowns - Average
-6.66 -5.57 -5.56 -5.60 -5.81 -5.86

For a deeper insight, please refer to the Vanguard Conservative Income Portfolio: ETF allocation and returns page.