Well now, we’ve had quite a run since the shock of Trump’s tariffs scattered our forces back in April.
Monevator’s Slow & Steady passive portfolio has rebounded almost 13% since the aftermath of Liberal With The Truth Liberation Day. I hope yours has done at least as well.
Overall, the portfolio has grown 6% so far in 2025. Which feels odd given the 24/7 bombardment of pessimism that’s churning up my online world. It’s getting to the point where I’m turning to real life for an escape.
Anyway, here are the latest numbers fresh from the manna-sphere:
The Slow & Steady is Monevator’s model passive investing 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 and find all the previous passive portfolio posts in the Monevator vaults. Last quarter’s instalment can be found here. Subtract about 3% from the portfolio’s annualised performance figure to estimate the real return after inflation.
Ignoring the third-quarter’s thrivers and divers for a moment, the thing that catches my eye is the portfolio has broken through six figures in total value. We’re clocking in at £100,713 on the table above.
That’s quite something for a portfolio launched in 2011 with £3,000. It’s been run passively ever since on an inflation-adjusted £250 per month in cash contributions.1
(Just to stress again, this is a model portfolio. The attached monetary values are entirely notional. But I used the same kind of passive investing strategy to grow my own wealth if you’re concerned about skin in the game.)
Growing modest savings into such a sum seemed unimaginable to a younger me. I had zero interest in the stock market and couldn’t stop splurging away everything I earned.
I thought investing was the preserve of the rich and highly informed financial experts. Ha!
Think again
But as millions of investors have already discovered – and our model portfolio is just the latest to demonstrate – it’s entirely possible to achieve good results by sticking to a passive plan:
The dark green line shows the portfolio’s return in nominal terms. The more important lower (lighter) inflation-adjusted line represents the Monevator model portfolio’s real annualised return of 4%.
We’re bang on the historical average for a 60/40 portfolio. Granted, that’s not spectacular – but this portfolio isn’t called Slow and Steady for nothing.
Of course, my inner critic is scornful. He casts brickbats like:
“You fool! What if you’d invested less in bonds?”
And:
“Why didn’t you foresee the AI revolution and invest 100% in Nvidia in 1999?”
But I look again at the chart above and I’m reminded of Charley Ellis’ brilliant description of investing as a loser’s game. By which he meant you win primarily by avoiding egregious mistakes.
In other words, you come through by playing the percentages and limiting your unforced errors. As opposed to trying to smash it with spectacular winners.
Ellis’ metaphorical inspiration was amateur tennis. If you’d seen me play tennis you’d understand why I’m happy with average.
New transactions
Every quarter we lob £1,310 over the investing net, hoping the rally keeps going. The cash is split between our seven funds, according to our predetermined asset allocation.
We rebalance using Larry Swedroe’s 5/25 rule. 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 44.19 units @ £2.37
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 27.68 units @ £2.37
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 0.625 units @ £775.82
Target allocation: 37%
UK equity
Vanguard FTSE UK All-Share Index Trust – OCF 0.06%
Fund identifier: GB00B3X7QG63
New purchase: £65.50
Buy 0.204 units @ £320.79
Target allocation: 5%
Global small cap equities
Vanguard Global Small-Cap Index Fund – OCF 0.29%
Fund identifier: IE00B3X1NT05
New purchase: £65.50
Buy 0.135 units @ £484.60
Target allocation: 5%
UK gilts
Vanguard UK Government Bond Index – OCF 0.12%
Fund identifier: IE00B1S75374
New purchase: £301.30
Buy 2.275 units @ £132.43
Target allocation: 23%
Royal London Short Duration Global Index-Linked Fund – OCF 0.27%
Fund identifier: GB00BD050F05
New purchase: £222.70
Buy 203.193 units @ £1.096
Target allocation: 17%
New investment contribution = £1,310
Trading cost = £0
Average portfolio OCF = 0.17%
User manual
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Take it steady,
The Accumulator
- Today’s £1310 quarterly investment is the inflation-adjusted equivalent of £750 per quarter in 2011. [↩]
@TA:
IIRC:
a) rate of return is the IRR or money weighted return (to account for the net contributions*);
b) contributions are escalated by RPI; and
c) nominal return is converted to a real return by CPI; were you to use RPI for this conversion it would be c. 1%PA lower
Is that essentially correct?
* ie any trading cost(s) would be deducted at source
Thanks for the article.
Surprised the IL bonds returned so much more than the government bond fund. I’ll look up to see if the vanguard fund is hedged…..knowing you I’d be surprised if it wasn’t mind.
Can you remind me why you went for funds rather than etf’s ?
Thank U @TA for another engaging write up of our old friend the S&S. 4 points leap out:
1. Isn’t it shocking how much inflation we’ve endured since 2011 (£750/quarter has become £1,310), given we were all told inflation was dead and buried in the 2010s? All those mid-last decade bylines about $(N) trillion of DM sovereign debt on negative yield.
2. I’m feeling reassured the 4% annual average real return since 2011 isn’t higher and is itself only average for the whole history of returns for the 60/40. The return of the last 14 years doesn’t suggest to me ‘bubble time’ for the 60/40, even if parts of the US market look rather overcooked on most valuation metrics (but even then not all, EPS measures registering less extreme).
3. If you could go back to the start of the S&S but only have had the same info back then as you did then (and not what you know now), would you then have done anything different? Personally, I just wish return stacking/capital efficiency had been a thing in the UK then – i.e. WGEC ETF is just a 90/60.
4. “Why didn’t you foresee the AI revolution and invest 100% in Nvidia in 1999”: I torture myself with this one every day, albeit, even if I had been blessed with some prophetic abilities (spoiler alert, I wasn’t), I’d have still only commited ~1%, not 100% (it’s up 5,000x since 1999, so ~1% can still be life-changing); and noone could have had any inkling of what Nvidia *might* become until at least CUDA came out in 2007 (since when NVDA is up ‘only’ a few hundred x) – and you’d still have had to have been a deep subject areas expert on both the semi sector generally, and also GPU architecture and software specifically.
Rather boringly (and sadly) for the many financially and technically savvy investors on this blog just choosing a global index equity and bond fund (2 funds only?) set up in your chosen asset allocation and then leaving well alone seems to be a winning investment strategy -so far!
xxd09
Impressive that Charles D. Ellis’s “Winning the Loser’s Game” is now in its eighth edition. I bought and read the third edition published in 1998. This was the start of my steady conversion to index investing.
Good to see the Slow and Steady portfolio just chugging along, despite all the political alarms and excursions. Pretty much mirrors what I see in my similar portfolio. I hope I can fend off the itch to ‘do something’ for long enough.
On the path not taken (NVIDIA or whatever), evidence of breakout performance is never visible in foresight, only in hindsight. Most of the complex arguments for why this or that sector or stock will do better than the rest are entertaining, but no way to predict the future. We just have to live with it.