Performance and risk through financial market cycles

Our portfolios are investable through ETFs and we can follow both their historical as well as their future performance transparently. Looking at historical performance over a longer-term investment horizon is not only interesting and illustrative, but also provides you with insight on how these portfolios behave during certain market scenarios and cycles and hence give you an idea about the level of risk you are taking and the respective return you can realistically expect.

Follow performance for our five portfolios "A1-5" for different time periods, over more than 30 years of historical data. Moreover, compare and relate performance to other equity or fixed income indices and see how our portfolios perform through different financial market cycles.

Look at risk and return from a different angle. Here we show annual returns and maximum annual draw-downs, i.e. the performance difference between peak a trough within a given year, for all our benchmark portfolios.

This way you get a feeling for the variability of returns, changing from year to year, as well as the level of risk, measured by draw-down. We have chosen to show draw-down here, since this is what investors feel and can relate to from a behavioral finance aspect. It is a better measure than simply volatility, which is more difficult to relate to a realized level of risk.

Note that this risk-return chart is simply a different way to show portfolio performance and risk and the numbers are based on the same underlying portfolio data as for the performance chart above.

“Successfully investing professionals are disciplined and consistent

and they think a great deal about what they do and how they do it.”

Benjamin Graham

..other large and successful long-term capital market investors

The Government Pension Fund of Norway is one of the world's largest Sovereign Wealth funds with more than $800 billion of assets under management. The Pension fund is saving for future generations in Norway and aims to make the most of its two distinguishing characteristics, its long-term approach and its considerable size, to generate strong returns and safeguard wealth for future generations. The fund's performance is published on it's website and hence available for comparison.

In the chart below you can see how our benchmark portfolio A3 compares to the Norwegian Pension fund. You can see that our portfolio performs very similar in terms of risk characteristics, i.e. it has a similar volatility and risk profile in terms of downside deviation and drawdown. In is interesting to see that, over the long run, our A3 portfolio can even outperform the Norwegian Pension fund.

Hence our portfolios compare very well to the best managed, diversified global cross-asset strategies. They do not only serve as a simple and transparent, yet state-of-the-art benchmarks, but can also be invested into in a very simple and efficient manner as building blocks for a long-term oriented wealth plan.