Ray Dalio All Weather Portfolio: ETF allocation and returns (2024)

FAQs

What is the average return of Ray Dalio's all-weather portfolio? ›

As of Jun 25, 2024, the Ray Dalio All Weather Portfolio returned 4.11% Year-To-Date and 5.09% of annualized return in the last 10 years.

In the last 30 Years, the Ray Dalio All Weather Portfolio obtained a 7.50% compound annual return, with a 7.43% standard deviation. It suffered a maximum drawdown of -20.58% that required 29 months to be recovered.

Remember the asset allocation for the All Weather Portfolio: 40% long-term bonds, 30% stocks, 15% intermediate-term bonds, 7.5% gold, and 7.5% commodities. That's the goal asset allocation you should have when you're finished rebalancing.

According to Bridgewater Associates, the average annual return for the All Weather Portfolio from 1996 to 2020 inclusive was 9.7%. The average annual return of the S&P 500 for the same period was 7.6%.

The Ray Dalio All Weather Portfolio granted a 2.60% dividend yield in 2023. Video Player is loading.

Ray Dalio All Weather Portfolio Asset Allocation

30% U.S. Stocks. 40% Long-Term Treasury Bonds. 15% Intermediate-Term Treasury Bonds. 7.5% Commodities.

The Harbor Commodity All-Weather Strategy ETF (HGER) seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the Quantix Commodity Index.

The company's website still lists Dalio, who announced his retirement from the company in October 2022, as a mentor to its CIOs and as a member of its governing board.

A common allocation for this portfolio is 30% equities, 55% long-term bonds, 15% intermediate-term bonds, and smaller allocations to commodities and gold.

How to invest in an all-weather portfolio? ›

One of the best ways to create an all-weather portfolio is to allocate 10-15% of your portfolio to gold. You need not keep it invested in physical gold but you can also hold in the form of gold bonds or gold ETFs. These are equally effective.

Finding the right mix for your portfolio. One of the first things you learn as a new investor is to seek the best portfolio mix. Many financial advisors recommend a 60/40 asset allocation between stocks and fixed income to take advantage of growth while keeping up your defenses.

About Ray Dalio's All Weather

Ray Dalio's All Weather portfolio is an investment strategy designed to perform well across different economic conditions. The goal of the All Weather portfolio is to generate consistent returns while minimizing risk, regardless of the economic environment.

All weather funds typically have flexible investment strategies that allow them to diversify across asset classes and utilize alternative techniques, such as sector rotation or macro-hedging, in order to manage for varying market changes.

Bridgewater's Pure Alpha fund averaged a compound annual return of 1.5 percent per year from January 2012 to December 31, 2022. That's a total 11-year return of 17.8 percent. That barely beat inflation. Meanwhile, the global stock market index averaged 8.93 percent over the same time period.

The basic expected return formula involves multiplying each asset's weight in the portfolio by its expected return, then adding all those figures together. In other words, a portfolio's expected return is the weighted average of its individual components' returns.

Portfolios that incorporate stocks and bonds along with inflation-sensitive assets like commodities, and seek to balance risk between these three legs of the stool, are often called “Risk Parity” or “All-Weather” portfolios.