All Weather

The All Weather Portfolio follows the approach Ray Dalio described in Tony Robbins’ book Money: Master the Game. Dalio, who founded the hedge fund Bridgewater, argued that investors cannot reliably predict which of four conditions the economy will be in: higher or lower inflation than expected, and higher or lower growth than expected. So a portfolio should hold assets that do well in each. This version holds equities, long-term and intermediate government bonds, gold and commodities through ETFs.

This portfolio may suit you if you want a diversified holding designed to hold up across different economic conditions and you value smaller falls more than higher peaks. It appeals to investors who do not want to make calls on inflation or growth. It is not for you if your goal is to match or beat the US equity market. It is built to do something different, and it will lag equities during strong bull runs.

Yes. Resident Indians can invest in the All Weather Portfolio through Vested under the RBI’s Liberalised Remittance Scheme (LRS), which currently allows you to remit up to USD 250,000 per financial year for overseas investments. You open a US investment account through Vested, complete a one-time KYC, and transfer money from your Indian bank account. The shares and ETFs are held in your own account in your name, not pooled in a fund, and you can sell and bring the money back to India whenever you want. Gains are taxable in India depending on how long you hold, so factor that into your planning.

Vested reviews every Managed Portfolio, including All Weather, once a quarter. A review does not automatically lead to a rebalance. The portfolio is only changed if the research team concludes that the existing allocation no longer makes sense, for example when a company no longer fits the theme or when the weights have drifted away from what was intended. Managed Portfolios are non-discretionary, which means nothing is bought or sold in your account on its own. You are notified when a change is recommended and you decide whether to approve it. There are no brokerage or transaction charges on rebalancing trades.

Because recreating this yourself means holding four asset classes in set proportions and rebalancing them, particularly the commodity and gold portions, which most people find tedious. A Managed Portfolio does that groundwork for you: Vested’s research team decides which companies go in, how much weight each one gets, and when something should change. You still own the actual shares and ETFs in your own US account, so you can see exactly what you hold, and this is not a fund unit. It also helps with a problem most people run into on their own, which is quietly ending up with far too much money in one stock. You pay an annual advisory fee on the amount you invest, with no purchase fee, no brokerage on rebalancing trades and no exit load. None of this stops you buying individual US stocks on Vested as well, if you want to do both.

The portfolio holds a large weight in long-term government bonds, and those are very sensitive to interest rates: when rates rose sharply in 2022, long-dated bonds fell heavily and the strategy struggled. Gold and commodities are volatile on their own and can go through long flat periods. The design assumes different assets will not all fall together, which mostly holds but not always. In strong equity markets this portfolio will trail a US equity portfolio, which is the trade-off. Vested tags it as low risk relative to its other portfolios. Because the holdings are priced in US dollars, your returns in rupees also depend on how the rupee moves against the dollar over the period you stay invested.

There are five steps. First, sign up on Vested and complete your KYC, a one-time process to open your US investment account. Second, add money by remitting from your Indian bank account under the LRS route. Third, open the All Weather Portfolio and read through its holdings, risk tag and fee before you commit. Fourth, invest the amount you want. You can start small and add to it over time, and there is no lock-in. Fifth, review it periodically and approve or decline any rebalancing recommendation you are sent. You can withdraw at any time without an exit load.

It is built to fall less than an all-equity portfolio when markets drop, because the bond, gold and commodity holdings do not usually move in the same direction as shares at the same time. In the 2008 financial crisis, this kind of allocation held up considerably better than the broad equity market. But it is not a hedge and it does not always work. In 2022, rising interest rates pushed bonds and equities down together, and long-dated government bonds, a large part of this portfolio, fell heavily, so it did not provide the cushion investors expected. The honest summary: it is designed to make bad years less bad, at the cost of trailing equities in good ones. Neither outcome is guaranteed.