In this episode of “What’s the Risk?” we take a look at the historic performance of various combinations of MSCI World ex Australia and the S&P/ASX 300 going back to 1980. The splits tilt 70/30, 60/40, 50/50, 40/60 and 30/70. All are rebalanced on an annual basis. Some investors would know the ETFs that seek to track the performance of these indices as the VAS/VGS split.
Which one will prevail over the longest timeframe? It might be a surprise, but there’s also not much in it, which underlines it’s probably better to focus on remaining disciplined over the long term instead of constantly tweaking an allocation.
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