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Return on a 40/60 portfolio
Old 09-28-2019, 12:18 PM   #1
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Return on a 40/60 portfolio

How can I get a good number to evaluate my performance against a 40/60 portfolio? Iím just over 5% for the year, but my benchmark is a 40/60 portfolio and Iíd like to know what that is YTD. Also will be looking for the same thing at year end and going forward so Iím looking for a good source.
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Old 09-28-2019, 12:48 PM   #2
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Look up the YTD return of your favorite stock index fund. Look up the same for your favorite bond index fund. Take 40% of the stock index fund return, add 60% of the bond index fund return, and Bob's your uncle.

For example,
SWPPX YTD = 19.92%
VBMFX YTD = 9.25%

0.4*19.92% + 0.6*9.25% = 13.518% is your benchmark comparison
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Old 09-28-2019, 12:54 PM   #3
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If you are a Fido user, they have benchmarks using all levels of equities in 10% increments, under the Performance tab.
They show through 8/31/19 the YTD return on a 40% equity index portfolio is 10.58%
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Old 09-28-2019, 01:18 PM   #4
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How can I get a good number to evaluate my performance against a 40/60 portfolio? Iím just over 5% for the year, but my benchmark is a 40/60 portfolio and Iíd like to know what that is YTD. Also will be looking for the same thing at year end and going forward so Iím looking for a good source.
What I did on 1/1/2015 was to put $100K of IRA money into two funds that I did not otherwise hold. 35% into Schwab International SWISX, and $65K into Vanguard Total Stock Market VTSAX. I use this "portfolio" as a benchmark for other portfolios, updating total performance every quarter, dividends reinvested and no rebalancing. If you PM me an email address after the market closes on Monday, I will send you the data.

I benchmark only equities because IMO bonds are a completely different animal: length, risk, rate -- pick any two and the market will tell you the third. So what does a benchmark tell me? Does it have exactly the same parameter values or are they different? Coloring this, too, is my complete lack of interest in junk and non-US bonds. Risk is for the equity side of my portfolio, not for the "safe" side.

When I use my equity benchmark to evaluate other portfolios, my rule is to have at least two years of data. Five would be better and ten better yet, though. Comparing on a quarterly basis is a fool's errand because over a short term the data is essentially random.

I do look at the published averages (ACWI mostly) but it is very difficult to be sure I am getting total return numbers. By having my one real boots-on-the-ground results I know exactly.
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Old 09-28-2019, 01:35 PM   #5
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If you are a Fido user, they have benchmarks using all levels of equities in 10% increments, under the Performance tab.
They show through 8/31/19 the YTD return on a 40% equity index portfolio is 10.58%
Thanks. I do still have some money in Fidelity and I'll look that up.

The 10.58% made me go back and look at my performance. I'm actually at 7.8% YTD. My original post was since inception which included the end of 2018. I feel a little better, but still like I could be doing better.
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Old 09-28-2019, 01:37 PM   #6
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Try this:

Portfolio Visualizer 40/60 Since 1987
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Old 09-28-2019, 01:41 PM   #7
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Vanguard LifeStrategy Conservative Growth fund VSCGX is a 40/60 fund of index funds, so it seems like a perfect benchmark for you. It is up 11.8% YTD.

See https://investor.vanguard.com/mutual...formance/vscgx

A 40/60 benchmark can vary with the amount of foreign stocks and bonds versus solely US stocks and bonds, too.
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Old 09-28-2019, 01:47 PM   #8
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For another idea, https://www.marketwatch.com/investing/fund/vbiax
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Old 09-28-2019, 01:51 PM   #9
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VBIAX is a 60/40 fund and not a 40/60 fund.
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Old 09-28-2019, 01:52 PM   #10
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If you are a Fido user, they have benchmarks using all levels of equities in 10% increments, under the Performance tab.
They show through 8/31/19 the YTD return on a 40% equity index portfolio is 10.58%
I read recently that not all Fido clients are given access to a Performance tab. I looked and I don't have any Performance tab available for my Fido accounts.
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Old 09-28-2019, 02:03 PM   #11
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Thanks. I do still have some money in Fidelity and I'll look that up.

The 10.58% made me go back and look at my performance. I'm actually at 7.8% YTD. My original post was since inception which included the end of 2018. I feel a little better, but still like I could be doing better.
The bond portion of the equation is of course weighted by great bond performance this year.
If you are using CD's and other bond substitutes, that could be one reason for your lower number.
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Old 09-28-2019, 02:05 PM   #12
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I read recently that not all Fido clients are given access to a Performance tab. I looked and I don't have any Performance tab available for my Fido accounts.
My understanding is you have to have enough history to be able to calculate meaningful returns. I don’t what the minimum timeframe is. I have been with Fido for 10 years.

Also, the tab may appear as a link under the More tab.
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Old 09-28-2019, 02:12 PM   #13
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My understanding is you have to have enough history to be able to calculate meaningful returns. I donít what the minimum timeframe is. I have been with Fido for 10 years.

Also, the tab may appear as a link under the More tab.
I found it under the Performance tab. Thank you, that's exactly what I was looking for.
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Old 09-28-2019, 04:10 PM   #14
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How can I get a good number to evaluate my performance against a 40/60 portfolio? I’m just over 5% for the year, but my benchmark is a 40/60 portfolio and I’d like to know what that is YTD. Also will be looking for the same thing at year end and going forward so I’m looking for a good source.
I would suggest Portfolio Visualizer.

https://www.portfoliovisualizer.com/...nalysisResults

Next to Portfolio #x there is a drop down menu and 40/60 is the last selection.

Jan- Aug 2019 is 12.71%... they only do whole months so YTD Sept will be available next week.
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Old 09-28-2019, 05:25 PM   #15
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I found it under the Performance tab. Thank you, that's exactly what I was looking for.
Index Blend 40% Stocks
Comprised of the following indexes: 28% DJ U.S. Total Stock Market Index (Domestic Stocks), 12% MSCI ACWI ex USA (Net MA Tax) (Foreign Stocks), 45% BBG U.S. Aggregate Bond Index BBG (Domestic Bonds) and 15% U.S. 3 Month Treasury Bellwether Index (Domestic Cash)

One point is that in choosing this option using the Fidelity performance tab, 15% of the benchmark is cash (25% of the bond allocation). Another is that the 40% stock allocation is spread domestic and international while the bond allocation is US only.

Just some things to keep in mind.
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Old 09-29-2019, 03:19 PM   #16
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The bond portion of the equation is of course weighted by great bond performance this year.
If you are using CD's and other bond substitutes, that could be one reason for your lower number.
Good point. Just as one shouldn't be too alarmed when bond funds and drops, unless you sell, an increase in nav does mean much either. Out oif curiosity i took a look at Fidelities fixed income analysis and found that my brokered CD's have appreciated substantially. Factoring this into my equity ytd return results in a little over 10%ytd overall.

However since I'm selling nothing all i care about is the interest and dividend stream
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