For StashAway - General Investing,I did some calculations based on the current portfolio holdings( I did not consider the holdings prior to recent optimisation due to lack of info) for all 12 risk indexes(ranging from 6.5% to 36%) and backtested it to see whats the YTD return for 2020. I got the following results:
6.5% Risk Index - 1.85% 8% Risk Index - 2.33% 10% Risk Index - 2.92% 12% Risk Index - 3.93% 14% Risk Index - 4.16% 16% Risk Index - 4.01% 18% Risk Index - 4.38% 20% Risk Index - 3.86% 22% Risk Index - 4.44% 26% Risk Index - 4.92% 30% RIsk Index - 4.34% 36% Risk Index - 3.89%
You can see the higher returns are skewed towards the higher risk for now, presumably because of the recovery of markets in some countries especially the U.S. If we see a more gradual recovery of world markets in the next few weeks and months, I believe the highest risk indexes like 30% and 36% may catch up in performance. If a second wave strikes and market tanks, higher risk indexes will fall faster than lower risk index portfolios due to higher concentration of equities.
I also did the same for year 2019 which was a year where we saw a major bull run. For 2019, it was very obvious that there's a direct relationship between risk and returns. Portfolios with the higher StashAway Risk Index enjoyed greater returns and vice versa. Returns range from 5.99% in the 6.5% risk index portfolio to 20.93% in the 36% risk index portfolio.
TLDR: Low risk index portfolios = Low risk low return; High risk index portfolios = High risk high returns
Do note that these figures were calculated based on the latest composition of all the portfolios and do not factor in any optimisation done which may affect the real past performance.
Source:
2020 YTD Performance for StashAway
2019 Performance for StashAway
For StashAway - General Investing,I did some calculations based on the current portfolio holdings( I did not consider the holdings prior to recent optimisation due to lack of info) for all 12 risk indexes(ranging from 6.5% to 36%) and backtested it to see whats the YTD return for 2020. I got the following results:
6.5% Risk Index - 1.85% 8% Risk Index - 2.33% 10% Risk Index - 2.92% 12% Risk Index - 3.93% 14% Risk Index - 4.16% 16% Risk Index - 4.01% 18% Risk Index - 4.38% 20% Risk Index - 3.86% 22% Risk Index - 4.44% 26% Risk Index - 4.92% 30% RIsk Index - 4.34% 36% Risk Index - 3.89%
You can see the higher returns are skewed towards the higher risk for now, presumably because of the recovery of markets in some countries especially the U.S. If we see a more gradual recovery of world markets in the next few weeks and months, I believe the highest risk indexes like 30% and 36% may catch up in performance. If a second wave strikes and market tanks, higher risk indexes will fall faster than lower risk index portfolios due to higher concentration of equities.
I also did the same for year 2019 which was a year where we saw a major bull run. For 2019, it was very obvious that there's a direct relationship between risk and returns. Portfolios with the higher StashAway Risk Index enjoyed greater returns and vice versa. Returns range from 5.99% in the 6.5% risk index portfolio to 20.93% in the 36% risk index portfolio.
TLDR: Low risk index portfolios = Low risk low return; High risk index portfolios = High risk high returns
Do note that these figures were calculated based on the latest composition of all the portfolios and do not factor in any optimisation done which may affect the real past performance.
Source:
2020 YTD Performance for StashAway
2019 Performance for StashAway