I don’t know about you but I’ve forgotten all about the AI bubble [1] since the Iran War started. So that’s something.
However, despite every fund we own falling back since Trump went nuts, the Slow & Steady passive portfolio has still managed to eke out a 2% gain since our last check-in [2] three months ago.
Trump go boom-boom
Here’s what happened to the portfolio’s equity funds since the start of the year:
[3]Chart from Morningstar. Nominal annualised total returns (GBP).
This chart is as good an example as you could wish for to show that attempting to predict the markets is a massive waste of time.
Everything was going great guns until bombs started dropping on 28 February. No bombs – no reason for the market to plummet.
Was Trump’s decision predictable? Fundamentally, no.
You could argue that the presence of a US carrier strike group in the Gulf meant something was up. But look at the pivotal point on the chart. If a deal had been struck before 28 February, equities would have probably continued upwards.
As it was, it was fastest fingers first on the ‘sell’ button when the market opened on 2 March.
Nobody knew which way the war-cookie was going to crumble beforehand. Apart from a lucky few who took some – ahem – ballsy flutters [4] on the prediction markets, of course.
How did bonds do?
I’m so glad you asked! Here’s the year-to-date performance of the Slow & Steady portfolio’s much-vaunted defensive partnership:
[5]Linkers = World index-linked government bonds hedged to GBP. Gilts = Nominal UK government bonds (All Stocks).
Nominal government bonds do not love an inflationary supply shock – as we saw in 2022 [6].
Hence they’re down again, and standing by for a slump more to their liking. (Think something more along the lines of the Dotcom Bust [7] or the Global Financial Crisis [8], where demand and liquidity dry up.)
More pleasantly, our index-linked bond fund looks reasonably solid.
It’s a short-term bond fund for one thing, which makes it inherently less volatile than a longer duration [9] gilts tracker. Plus, it’s chock full of inflation-linked bonds. So you’d hope it would perform tolerably well when the consumer price index ticks up.
That said, the very same fund did not cover itself in glory in 2022. Read our individual index-linked gilt vs linker fund comparison [10] for the gory details.
Though it took a while to reveal itself, our passive portfolio’s greatest weakness has proved to be its lack of defensive diversification [11]. If I was starting again now, our model portfolio [12] would include cash, gold, and commodities too.
Commodities are the one asset that is positively thriving [13] right now.
Portfolio raw numbers time
What? You think I’ve been stalling? Well, maybe I have… Here’s the latest scores-on-the-doors, brought to you in CrisisWhatCrisis-o-vision:
[14]The Slow & Steady is Monevator’s model passive investing [15] portfolio. It was set up at the start of 2011 with £3,000. An extra £1,360 is invested every quarter into a diversified set of index funds, tilted towards equities. You can read the origin story [16] and find all the previous passive portfolio posts [17] in the Monevator vaults. Last quarter’s instalment can be found here [2].
All returns in this post are nominal GBP total returns unless otherwise stated. Subtract about 3% from the portfolio’s annualised performance figure to estimate the real return after inflation.
The portfolio’s overall annualised return since inception is 7.36%. Subtract average inflation [18] over the period and the real return is about 4.5%.
That will do nicely. The average annualised real return for a 60/40 World/gilts portfolio is 4% since 1900. 1 [19]
The story over the portfolio’s lifetime has essentially been equity returns good, bond returns bad.
Grinding out a result
It’s easy to lose sight of, but the Slow & Steady has grown from £3,000 to over £100,000 in 15 years.
That figure places the model portfolio well above the average £80,000 held in pension wealth by people in my age bracket, according to this 2025 analysis [20] of ONS data.
What’s more, this six-figure sum was achieved with relatively modest monthly contributions (£250 a month in 2010 money) and zero pension tax relief, too. (The portfolio is assumed to be held in an ISA.)
No fancy funds or strategies were used. No leverage or market timing. No kung-fu or specialist knowledge required.
All anyone had to do was follow the rules of a straightforward passive investing strategy [15] and keep the faith long enough for it to pay off. (That’s the hard bit.)
It works and there’s no need to over-think it.
The long-term picture
The next chart shows the portfolio’s growth trajectory, along with the various setbacks along the way:
[21]That is one boring chart. It looks like nothing happened. The portfolio has gently wafted up, and world events failed to knock it down again for any period longer than nine months. We shrugged off the drip-feed of fear [22].
That said, our model portfolio is still down from its December 2021 peak in real terms (See the lighter green line). That only goes to show how pernicious inflation [23] can be.
Fund / asset class returns
Here’s a breakdown of the portfolio’s individual fund performance, with an eye to the short and long-ish runs:
| Fund | YTD (%) | 1yr (%) | 10yr (%) |
|---|---|---|---|
| Emerging markets | 5.7 | 34.5 | 9.1 |
| Real estate | 5.3 | 14.5 | 3.9 |
| World ex-UK | 1.8 | 28.8 | 13.4 |
| UK equities | 7.5 | 36.8 | 9.1 |
| World Small cap | 7 | 37.4 | 10.6 |
| UK gov bonds | -1.2 | 3 | -1.2 |
| Inflation-linked bonds | 1.7 | 5.6 | 2.4 |
Data from Morningstar. Nominal total returns (GBP). 10-year figure is annualised.
The short-term view tells us that equity diversification is back in vogue. Emerging markets and UK equities beat the MSCI World – and even the S&P 500 – over the last two years.
How many people don’t even look at UK equities [24] anymore because the British economy appears moribund and the S&P 500 has smashed all-comers for years?
Stop performance chasing, people!
Okay, that’s enough tilting at windmills for one update.
New transactions
Every quarter we throw £1,360 of red meat to the wild dogs of the market. Our stake is split between our seven funds, according to our predetermined asset allocation.
We rebalance using Larry Swedroe’s 5/25 rule [25]. That hasn’t been activated this quarter, so the trades play out as follows:
Emerging market equities
iShares Emerging Markets Equity Index Fund D – OCF 0.19%
Fund identifier: GB00B84DY642
New purchase: £108.80
Buy 42.2377 units @ £2.58
Global property
iShares Environment & Low Carbon Tilt Real Estate Index Fund – OCF 0.17%
Fund identifier: GB00B5BFJG71
New purchase: £68
Buy 27.2076 units @ £2.50
Developed world ex-UK equities
Vanguard FTSE Developed World ex-UK Equity Index Fund – OCF 0.14%
Fund identifier: GB00B59G4Q73
New purchase: £503.20
Buy 0.6141 units @ £819.40
UK equity
Vanguard FTSE UK All-Share Index Trust – OCF [26] 0.06%
Fund identifier: GB00B3X7QG63
New purchase: £68
Buy 0.1848 units @ £367.93
Global small cap equities
Vanguard Global Small-Cap Index Fund – OCF 0.29%
Fund identifier: IE00B3X1NT05
New purchase: £68
Buy 0.1272 units @ £534.69
UK gilts
Vanguard UK Government Bond Index – OCF 0.12%
Fund identifier: IE00B1S75374
New purchase: £285.60
Buy 2.1073 units @ £135.53
Global inflation-linked bonds [27]
Royal London Short Duration Global Index-Linked Fund – OCF 0.27%
Fund identifier: GB00BD050F05
New purchase: £258.40
Buy 234.2702 units @ £1.103
New investment contribution = £1,360
Trading cost = £0
Average portfolio OCF = 0.17%
User manual
Disclosure: Links to platforms may be affiliate links, where we may earn a commission. This article is not personal financial advice. When investing, your capital is at risk and you may get back less than invested. With commission-free brokers other fees may apply. See terms and fees. Past performance doesn’t guarantee future results.
Take a look at our broker comparison [28] table for your best investment account options.
Or learn more about choosing the cheapest stocks and shares ISA [29] for your situation.
If this seems too complicated, check out our best multi-asset fund [30] picks. These include all-in-one diversified portfolios such as the Vanguard LifeStrategy funds [31].
You might also enjoy a refresher on why we think most people are best choosing passive vs active investing [32].
Take it steady,
The Accumulator
- Jan 1900 to Dec 2025 real total returns in GBP.[↩ [33]]