In this episode of “What’s the Risk?” we examine the historical performance of a 60/40 portfolio combining the MSCI World ex Australia Index (net div., AUD) and the S&P/ASX 300, rebalanced annually. Popular among Australian DIY investors, this portfolio is often implemented using Vanguard’s VGS and VAS ETFs, tracking the respective indices.
Since its hypothetical inception in 1980, we analyze the portfolio’s journey through market cycles, covering short- and long-term periodic performance, growth of wealth, range of returns, average returns, rolling annual returns, largest drawdowns, recovery periods, and its risk-return profile along the efficient frontier compared to other asset classes, such as bonds and global fixed income.
This episode evaluates whether the 60/40 VAS/VGS split suits long-term investment strategies. By blending global diversification with Australian equities, the portfolio mitigates risks tied to single-market exposure while capturing growth across sectors and economies. We discuss the impact of volatility, the role of dividends, and the discipline required to maintain the allocation through turbulent times.
Watch the index portfolio that tracks Vanguard’s VAS/VGS ETF video.
This represents general information only. Before making any financial or investment decisions, I suggest you consult a financial adviser to take into account your personal investment objectives, financial situation and individual needs. Anyone looking to build a portfolio should seek financial advice to find out which strategy is right for them, if you are a high net worth investor looking financial advice then you should consider Australia’s best financial advisers, they can help you identify your goals and put in place a reliable strategy to pursue them.
