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STRATEGIES

All Weather Strategy

A diversified Sleep Well at Night Portfolio

What is an all-weather portfolio?

While one may find many different definitions of an all-weather portfolio, the way we define it is as follows.

Lower Drawdowns, Stronger Wealth Preservation

A diversified mix reduces concentration risk. By spreading exposure across uncorrelated assets, peak-to-trough declines are typically shallower than a single-asset allocation.

Built-In Hedges Across Market Regimes

Assets behave differently under stress, creating natural offsets informed by liquidity preference and flight-to-safety effects. When one falters, another often cushions the portfolio.

A Foundation for Long-Term Wealth Creation

Smaller drawdowns and steadier compounding help investors stay invested through cycles, laying the groundwork for durable, long-term wealth growth.

There are many articles and educational content on the web. Here are some references.


As you may have read in the references, an all-weather portfolio typically consists of 4 asset classes – Stocks, Bonds, Commodities and Gold. While we would like to include some tail hedging or Long volatility instruments, the markets in India are a bit complex and the liquidity of such instruments is sparse. Hence we have focused on the above asset classes. The all-weather portfolio will include highly liquid ETFs that track the 4 assets. The rules of the all-weather portfolio are very simple and are …

  1. Invest in the 4 asset classes with a % age allocated to each
  2. At the end of the year, rebalance to maintain the % age allocation that we began with


The ETFs of the all-weather portfolio are …

GoldGOLDBEES.NS
SilverSILVERBEES.NS
Govt 5 YearGILT5YBEES.NS
Govt 8-13 YearLTGILTBEES.NS
NIFTY500MONIFTY500.NS


As you can see above, we have used Silver instead of commodities as the market in India still does not allow us to track the performance of a basket of commodities via a Physical commodity ETF.

We back-tested the above mix of assets from 2010 through 2023 and the portfolio produced a CAGR of about 9% whereas the NIFTY500 produced a return of 12%. It is important to note that the 12% return is based on higher risk and drawdowns. The all-weather portfolio is a sleep-well-at-night portfolio best suited for retirement accounts and risk-averse investors.

QuantMomo All Weather Strategy - Performance for FY 2024-25

In January 2024, QuantMomo added the All-Weather strategy to minimize the drawdowns and enable investors with a SWAN (Sleep Well At Night) approach. The strategy included 5 assets comprising Equities (NSE500 Index), Gold, Silver, and bonds (5-year GILT and 10-year GILT). We are pleased to report that the strategy performed in line with its goals. The strategy has produced an alpha in the financial year thanks to Gold and Silver rallying to all-time highs. Please see our detailed blog post (link below).

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