This time three months ago, the Slow & Steady passive portfolio was suffering under the strain of Trump’s one-man assault on the global trade system. But we’ve made up all our losses since then.
Indeed we’re now ahead, albeit by a none-too-convincing 1.6% year-to-date.
Our four equity funds have put on double-digit gains in the space of a quarter. Global property is dragging its heels though – and good old gilts [1] continue to make me rue the day.
Here are the numbers. See the annualised returns column for the all-important long-term gains:
[2]The Slow & Steady is Monevator’s model passive investing [3] portfolio. It was set up at the start of 2011 with £3,000. An extra £1,310 is invested every quarter into a diversified set of index funds, tilted towards equities. You can read the origin story [4] and find all the previous passive portfolio posts [5] in the Monevator vaults. Last quarter’s instalment can be found here [6]. Subtract about 3% from the portfolio’s annualised performance figure to estimate the real return after inflation.
Stick or twist
I’m more convinced than ever that nobody (but nobody) can predict what’s around the corner.
Is the US market being slowly poisoned by political risk? Or is it the last bastion of economic dynamism in the Western world?
Flip a coin? Best of three?
I’m in no hurry to make a call. The political and commercial climate seems so changeable, I’d sooner make a claim for whiplash.
It’s funny how the more febrile the world becomes, the more obvious it should be – but somehow isn’t – that a passive strategy makes sense.
The thing is: we’re primed to look for new answers to new problems. Ideas, strategies, and products that are supposedly tailor-made to meet the moment.
It’s less the triumph of hope over experience than the triumph of marketing over rationality.
Perhaps there’s an analogy to be drawn between attitudes to passive investing and the apparent loss of faith in our democratic institutions?
Both realms offer the same old solutions. Products that can only achieve so much and suffer from a perceived lack of ambition in the age of moonshots. Results that are far from guaranteed and sometimes you must go backwards before you go forwards. Patience required.
The alternative? Roll the dice on a buzzy new venture fronted by a man with a tan promising the Earth.
Because that always works, right?
Portfolio Manager R.I.P.
In other developments, Morningstar’s Portfolio Manager has finally died a death. You can still visit the embalmed remains of your portfolio for a few weeks but you may not like what you see.
Four out of my five portfolios were inaccessible and the promised Export Data function doesn’t work.
Morningstar has long neglected what was a really excellent tool that could have been a fantastic promotional opportunity for its brand.
As it is, losing 16 years of transaction data is exactly the sort of customer disservice we’re being conditioned to expect from companies that do the cost-benefit analysis and decide they’d rather absorb the reputational shrapnel than look after their users.
I intend to road-test some alternatives over the coming weeks, so please let me know if you’ve found a happy home for your portfolio.
I suspect a bespoke spreadsheet may be the way forward in the end. Enforced rooting around the Internet – plus some able assistance from ChatGPT – has helped me to automate much of the work.
My efforts aren’t slick enough to share yet. But hopefully we’ll have a workable portfolio spreadsheet ready for the Monevator Massive before too long.
New transactions
Every quarter we put £1,310 down on our portfolio’s horses and hope that a few eventually romp home in the steeplechase of life.
We split our stake between our seven funds, according to our predetermined asset allocation.
We rebalance using Larry Swedroe’s 5/25 rule [7]. 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 0.2%
Fund identifier: GB00B84DY642
New purchase: £104.80
Buy 48.64 units @ £2.15
Target allocation: 8%
Global property
iShares Environment & Low Carbon Tilt Real Estate Index Fund – OCF 0.17%
Fund identifier: GB00B5BFJG71
New purchase: £65.50
Buy 28.648 units @ £2.29
Target allocation: 5%
Developed world ex-UK equities
Vanguard FTSE Developed World ex-UK Equity Index Fund – OCF 0.14%
Fund identifier: GB00B59G4Q73
New purchase: £484.70
Buy 0.672 units @ £721.34
Target allocation: 37%
UK equity
Vanguard FTSE UK All-Share Index Trust – OCF [8] 0.06%
Fund identifier: GB00B3X7QG63
New purchase: £65.50
Buy 0.215 units @ £304.43
Target allocation: 5%
Global small cap equities
Vanguard Global Small-Cap Index Fund – OCF 0.29%
Fund identifier: IE00B3X1NT05
New purchase: £65.50
Buy 0.146 units @ £450.08
Target allocation: 5%
UK gilts
Vanguard UK Government Bond Index – OCF 0.12%
Fund identifier: IE00B1S75374
New purchase: £301.30
Buy 2.259 units @ £133.39
Target allocation: 23%
Global inflation-linked bonds [9]
Royal London Short Duration Global Index-Linked Fund – OCF 0.27%
Fund identifier: GB00BD050F05
New purchase: £222.70
Buy 205.443 units @ £1.08
Dividends reinvested: £167 (Buy another 154.06 units)
Target allocation: 17%
New investment contribution = £1,310
Trading cost = £0
Average portfolio OCF = 0.17%
User manual
Take a look at our broker comparison [10] table for your best investment account options.
InvestEngine [11] is currently cheapest if you’re happy to invest only in ETFs. Or learn more about choosing the cheapest stocks and shares ISA [12] for your situation.
If this seems too complicated, check out our best multi-asset fund [13] picks. These include all-in-one diversified portfolios such as the Vanguard LifeStrategy funds [14].
Interested in monitoring your own portfolio or using the Slow & Steady spreadsheet for yourself? Our piece on portfolio tracking [15] shows you how.
You might also enjoy a refresher on why we think most people are best choosing passive vs active investing [16].
Take it steady,
The Accumulator