Managing the Developed World 40/60 To GBP Hedged Portfolio with a yearly rebalancing, you would have obtained a 6.29% compound annual return in the last 30 Years.
With a quarterly rebalancing, over the same period, the return would have been 5.46%.
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 Developed World 40/60 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 Jul 31, 2025 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Rebalancing Strategy | 1Y | 5Y | 10Y | 30Y |
MAX (~51Y) |
|||||
| No Rebalancing | 11.48 | (0) | 8.07 | (0) | 6.23 | (0) | 6.29 | (0) | 9.75 | (0) |
| Yearly Rebalancing | 6.06 | (1) | 3.14 | (5) | 3.57 | (10) | 5.55 | (30) | 9.41 | (51) |
| Half Yearly Rebalancing | 5.76 | (2) | 3.10 | (10) | 3.56 | (20) | 5.46 | (60) | 9.35 | (102) |
| Quarterly Rebalancing | 5.85 | (4) | 3.00 | (20) | 3.62 | (40) | 5.51 | (120) | 9.39 | (204) |
| 5% Tolerance per asset | 6.14 | (1) | 3.26 | (4) | 3.58 | (5) | 5.50 | (15) | 9.35 | (22) |
| 10% Tolerance per asset | 6.19 | (0) | 3.73 | (2) | 3.84 | (2) | 5.79 | (8) | 9.55 | (10) |
In order to have complete information about the portfolio, please refer to the Developed World 40/60 To GBP Hedged Portfolio: ETF allocation and returns page.
Performances as of Jul 31, 2025
Historical returns and stats of Developed World 40/60 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 | 9.75 | (0) | 7.50 | 1.30 | -27.95 | 0.35 |
| Yearly Rebalancing | 9.41 | (51) | 6.85 | 1.37 | -23.82 | 0.40 |
| Half Yearly Rebalancing | 9.35 | (102) | 6.84 | 1.37 | -24.30 | 0.38 |
| Quarterly Rebalancing | 9.39 | (204) | 6.88 | 1.36 | -25.00 | 0.38 |
| 5% Tolerance per asset | 9.35 | (22) | 6.94 | 1.35 | -25.11 | 0.37 |
| 10% Tolerance per asset | 9.55 | (10) | 7.01 | 1.36 | -24.31 | 0.39 |
Drawdowns as of Jul 31, 2025
Historical Drawdowns of Developed World 40/60 To GBP Hedged Portfolio, after implementing different rebalancing strategies.
|
Rebalancing
|
Tolerance per asset
|
||||
|---|---|---|---|---|---|
| No Rebalancing | Yearly | Half Yearly | Quarterly | 5% | 10% |
|
-27.95
Nov 2007 - Jan 2013
|
-23.82
Nov 2007 - Jan 2012
|
-24.30
Nov 2007 - Jan 2012
|
-25.00
Nov 2007 - Feb 2012
|
-25.11
Nov 2007 - Feb 2012
|
-24.31
Nov 2007 - Feb 2011
|
|
-19.52
Jan 2022 - Feb 2024
|
-17.60
Jan 2022 - Nov 2024
|
-17.58
Jan 2022 - Nov 2024
|
-17.55
Jan 2022 - Nov 2024
|
-17.68
Jan 2022 - Nov 2024
|
-17.93
Jan 2022 - Sep 2024
|
|
-14.74
Apr 2000 - Dec 2003
|
-10.46
Sep 2000 - Aug 2003
|
-11.44
Sep 2000 - Sep 2003
|
-11.18
Sep 2000 - Aug 2003
|
-11.12
Sep 2000 - Sep 2003
|
-10.07
Sep 2000 - Jun 2003
|
|
-11.23
Feb 2020 - Aug 2020
|
-8.24
Sep 1987 - Feb 1988
|
-8.01
Feb 1994 - Jul 1995
|
-8.11
Feb 1994 - Jul 1995
|
-8.02
Feb 1994 - Jul 1995
|
-8.22
Feb 2020 - Aug 2020
|
|
-8.13
Feb 1994 - Jul 1995
|
-7.89
Feb 1994 - Jul 1995
|
-7.56
Aug 1990 - Feb 1991
|
-7.56
Aug 1990 - Feb 1991
|
-7.79
Sep 1987 - Feb 1988
|
-8.02
Feb 1994 - Jul 1995
|
| 5 Worst Drawdowns - Average | |||||
| -16.31 | -13.60 | -13.78 | -13.88 | -13.94 | -13.71 |
| 10 Worst Drawdowns - Average | |||||
| -11.61 | -9.85 | -9.99 | -10.02 | -10.21 | -10.15 |
For a deeper insight, please refer to the Developed World 40/60 To GBP Hedged Portfolio: ETF allocation and returns page.
