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All Weather Portfolio

Ray Dalio and the All Weather Portfolio: Strategy and Implementation

Ray Dalio, founder of Bridgewater Associates, is known for creating the “All Weather Portfolio”, a strategy designed to perform well in different economic conditions.
The idea behind this portfolio is smart diversification — spreading investments across asset classes that behave differently depending on whether the economy is growing, shrinking, facing inflation, or deflation.

Typical Asset Allocation in the All Weather Portfolio
– 7.5% Commodities – to protect from inflation shocks
– 30% Stocks – for long-term growth
– 40% Long-term government bonds – for protection in times of deflation and recession
– 15% Intermediate-term bonds – for stability in uncertain periods
– 7.5% Gold – as a hedge against inflation

How to Build It Using UCITS ETFs

You can replicate Dalio’s strategy using UCITS ETFs, which are regulated for European investors and tax-efficient.
Below are ETF examples for each category, with alternatives, ISIN codes, and market capitalisation.

1. Stocks – 30%

  • Primary ETF: Vanguard FTSE All-World UCITS ETF (Acc)
    • ISIN: IE00BK5BQT80
    • Exposure: Global equities, developed and emerging markets
    • Market Cap: Over $10 billion
  • Alternative ETF: iShares MSCI ACWI UCITS ETF
    • ISIN: IE00B6R52259
    • Exposure: Global equities
    • Market Cap: Over $6 billion

2. Long-Term Bonds – 40%

Primary ETF: iShares USD Treasury Bond 20+yr UCITS ETF

  • ISIN: IE00B1FZS798
  • Exposure: US government bonds with maturities over 20 years
  • Market Cap: Around $5 billion

Alternative ETF: Lyxor US Treasury 10Y+ DR UCITS ETF

  • ISIN: LU1407888513
  • Exposure: Long-term US Treasuries
  • Market Cap: Around $1 billion

3. Intermediate-Term Bonds – 15%

Primary ETF: iShares USD Treasury Bond 7-10yr UCITS ETF

  • ISIN: IE00B1FZS798
  • Exposure: US government bonds with 7–10 year maturities
  • Market Cap: Around $4 billion

Alternative ETF: SPDR Bloomberg 1-10 Year US Treasury Bond UCITS ETF

  • ISIN: IE00BZ163M45
  • Exposure: Short to mid-term US government bonds
  • Market Cap: Around $1.5 billion

4 . Gold – 7.5%

Primary ETF: Invesco Physical Gold ETC

  • ISIN: IE00B579F325
  • Exposure: Physical gold
  • Market Cap: Over $10 billion

Alternative ETF: Xetra-Gold ETC

  • ISIN: DE000A0S9GB0
  • Exposure: Physical gold stored in Germany
  • Market Cap: Over €10 billion

5. Commodities – 7.5%

Primary ETF: Invesco Bloomberg Commodity UCITS ETF

  • ISIN: IE00BD6FTQ80
  • Exposure: Broad commodities index
  • Market Cap: Around $2 billion

Alternative ETF: Lyxor Commodities CRB TR UCITS ETF

  • ISIN: LU1829218749
  • Exposure: Diversified commodity basket
  • Market Cap: Approx. $1 billion

Final Thoughts

Ray Dalio’s All Weather Portfolio is a well-diversified strategy, built to handle all market environments.
By using UCITS ETFs, European investors can follow this approach in a simple and compliant way.
Just remember: it’s not a set-and-forget strategy. You need to rebalance periodically to keep the right proportions and adjust to market changes.

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