Developed World ex-US 40/60 Portfolio: Rebalancing Strategy

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

Managing the Developed World ex-US 40/60 Portfolio with a yearly rebalancing, you would have obtained a 5.18% compound annual return in the last 30 Years.

With a quarterly rebalancing, over the same period, the return would have been 5.58%.

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 Developed World ex-US 40/60 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
DEVELOPED WORLD EX-US 40/60 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 17.51 (0) 3.85 (0) 3.99 (0) 5.18 (0) 7.30 (0)
Yearly Rebalancing 15.92 (1) 3.24 (5) 3.83 (10) 5.59 (30) 7.69 (40)
Half Yearly Rebalancing 15.79 (2) 3.36 (10) 3.88 (20) 5.58 (60) 7.66 (80)
Quarterly Rebalancing 15.83 (4) 3.55 (20) 3.95 (40) 5.61 (120) 7.66 (159)
5% Tolerance per asset 16.28 (1) 3.35 (2) 3.90 (4) 5.57 (15) 7.64 (22)
10% Tolerance per asset 16.24 (0) 3.11 (0) 3.83 (1) 5.53 (4) 7.68 (7)

In order to have complete information about the portfolio, please refer to the Developed World ex-US 40/60 Portfolio: ETF allocation and returns page.

Performances as of Sep 30, 2024

Historical returns and stats of Developed World ex-US 40/60 Portfolio, after implementing different rebalancing strategies.

DEVELOPED WORLD EX-US 40/60 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 7.30 (0) 9.44 0.77 -32.47 0.22
Yearly Rebalancing 7.69 (40) 8.07 0.95 -26.17 0.29
Half Yearly Rebalancing 7.66 (80) 8.10 0.95 -26.72 0.29
Quarterly Rebalancing 7.66 (159) 8.17 0.94 -27.34 0.28
5% Tolerance per asset 7.64 (22) 8.19 0.93 -27.29 0.28
10% Tolerance per asset 7.68 (7) 8.19 0.94 -27.53 0.28
(*) Since Jan 1985 (~40 yrs) | Annualized Returns (and number of rebalances)

Drawdowns as of Sep 30, 2024

Historical Drawdowns of Developed World ex-US 40/60 Portfolio, after implementing different rebalancing strategies.

DEVELOPED WORLD EX-US 40/60 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%
-32.47
Nov 2007 - Feb 2011
-26.17
Nov 2007 - Aug 2010
-26.72
Nov 2007 - Sep 2010
-27.34
Nov 2007 - Sep 2010
-27.29
Nov 2007 - Aug 2010
-27.53
Nov 2007 - Sep 2010
-21.07
Sep 2021 - Jul 2024
-19.57
Sep 2021 - Aug 2024
-19.74
Sep 2021 - Jul 2024
-19.75
Sep 2021 - Jul 2024
-19.91
Sep 2021 - Jul 2024
-19.82
Sep 2021 - Jul 2024
-19.58
Jan 1990 - Feb 1993
-12.17
Jan 1990 - Feb 1991
-12.86
Jan 1990 - Feb 1991
-12.70
Jan 1990 - Feb 1991
-12.55
Jan 1990 - Feb 1991
-12.55
Jan 1990 - Apr 1991
-15.34
Apr 2000 - Dec 2003
-9.84
Jan 2020 - Nov 2020
-9.84
Jan 2020 - Aug 2020
-9.84
Jan 2020 - Aug 2020
-10.58
Jan 2020 - Nov 2020
-9.52
May 2011 - Aug 2012
-11.25
Jan 2020 - Nov 2020
-8.00
Apr 2000 - May 2003
-9.12
Apr 2000 - Jun 2003
-9.10
Apr 2000 - May 2003
-8.88
Apr 2000 - May 2003
-9.28
Feb 2020 - Aug 2020
5 Worst Drawdowns - Average
-19.94 -15.15 -15.66 -15.74 -15.84 -15.74
10 Worst Drawdowns - Average
-13.80 -10.95 -11.15 -11.22 -11.24 -11.39

For a deeper insight, please refer to the Developed World ex-US 40/60 Portfolio: ETF allocation and returns page.