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The MoneyWeek ETF portfolio update for mid 2026
The weights in the MoneyWeek ETF portfolio will be out of line with their targets after a strong year. It's time to rebalance our allocation
The MoneyWeek ETF portfolio – which we have been running in one form or another since 2013 – is designed to be a very simple way to invest. It doesn't try to time the market, forecast the economy or pick specific stocks. It simply holds a diversified set of exchange-traded funds (ETFs) that complement each other, tilted towards the areas that we think offer the best value.
In any given year, some holdings are likely to do much better than others. Over time, the portfolio will drift away from its target weights. So once a year, we rebalance the holdings back to their target. For simplicity we usually do this at the start of a new tax year: this means that an investor could use the new tax year's contributions to an individual savings account (ISA) or pension to carry out the rebalancing.
The past year has been an eventful one, yet the MoneyWeek ETF portfolio is up by 25% – a much higher return than we would expect. That reflects strong performance from several positions. Gold is up 50% in sterling terms, even after slipping from its highs. More recently, the energy sector has done very well, up 58%. Emerging markets (up 42%) and Japan (up 38%) have been boosted by investors diversifying away from the US – although this has reversed a bit since the beginning of March. At the other end of the scale, bonds have been weak, although we have focused on short-dated bonds and so our holdings are more or less flat over the year.
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As a result, many of the MoneyWeek ETF portfolio weights will be quite far from target this time. The exact position will be different for every investor, but gold and emerging markets are both around two percentage points overweight in our tracked portfolio and most of the other holdings are around one percentage point underweight.
To minimise costs, our rule is not to rebalance any position that is only a small distance away from its target. Fiddling with small overweights and underweights incurs trading costs for no benefit. However, since this year will require quite a lot of trades in the tracked portfolio, we are going to reset all positions to target weights.
We are also going to make one change. We have been holding iShares $ Treasury Bond 3-7 Years GBP Hedged (LSE: CBUG), on the basis that we were most likely to see short-term interest-rate cuts, but volatility in longer-term bonds. However, the prospect for large cuts seems to be receding. Meanwhile, the risks of higher inflation are rising – it could easily top 3% again over the next year. In this scenario, the 4% nominal yield from CBUG looks less compelling than the 0.9% real yield from iShares $ TIPS 0-5 GBP Hedged (LSE: TI5G). We could increase our exposure to inflation-linked bonds, but there is also a case for adding more growth to the MoneyWeek ETF portfolio. So we will temporarily hold this as uninvested cash while waiting to see if the Middle East ceasefire holds.
This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.
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Cris Sholto Heaton is the contributing editor for MoneyWeek.
He is an investment analyst and writer who has been contributing to MoneyWeek since 2006 and was managing editor of the magazine between 2016 and 2018. He is experienced in covering international investing, believing many investors still focus too much on their home markets and that it pays to take advantage of all the opportunities the world offers.
He often writes about Asian equities, international income and global asset allocation.
