Das müssen Sie über das 70-30-Portfolio wissen (2024)

The 70/30 rule is widely considered to be the standard for a globally diversified investment portfolio. This moneyland.ch guide explains what you need to know about this investment rule.

What is a 70/30 portfolio?

A 70/30 portfolio is a widely used investment concept for a globally diversified investment portfolio. According to this rule, 70 percent of the portfolio should be made up of investments in developed countries, and 30 percent should be made up of investments in developing countries (emerging markets). The goal of this strategy is to dampen the risks posed by the heavy weighting of developed countries – and particularly the US – in global stock indexes.

Be aware that there are various interpretations of the terms developing country and emerging market (more on this further down).

How can I put together a 70/30 investment portfolio?

Theoretically, you can put together your own 70/30 portfolio by buying individual shares in companies in both developed and developing countries. However, using exchange-traded funds (ETFs) is much simpler and more cost-effective. You simply buy shares in one or several ETFs that invest in developed countries, and ETFs that invest in emerging markets.

ETFs are funds whose shares are traded on stock exchanges, just like the stocks of companies. They replicate stock indexes and are usually passively managed, which generally results in their having lower fees than actively managed investment funds. You can buy shares in ETFs using a stock brokerage account.

ETFs based on global stock indexes can be used to create a 70/30 portfolio. These ETFs are broadly diversified and aim to replicate the global stock market. According to the 70/30 rule, you would use an ETF to invest 70 percent of your capital in developed countries, and 30 percent in emerging markets.

Which global stock indexes track developed countries?

Developed countries make up the lion’s share of nearly all global stock indexes, except for those that explicitly exclude developed countries. Table 1 shows a selection of global stock indexes that track the stock markets of developed countries exclusively.

Table 1: Global stock indexes that track developed countries

Data as provided by index publishers. Date: 28.05.2024.

Although the Dow Jones Global 50 Titans Index, included in Table 1, is a global stock index, it is not a suitable basis for a 70/30 portfolio. The reason is that the index only tracks 53 stocks, so it is not broadly diversified. The FTSE Developed, the MSCI World, and the Solactive GBS Developed Markets are all much more diversified in terms of the numbers of stocks tracked. But it is important to note that the performance of these indexes is largely steered by the stock components with the heaviest weighting.

Which ETFs can I use to invest in global stocks indexes for developed countries?

Many well-known global indexes serve as the basis for numerous ETFs, which vary in terms of their total expense ratios (TERs), their domiciles, and the methods they use to replicate stock indexes. The moneyland.ch checklist for choosing an ETF explains what you should look at when choosing an ETF.

The following table lists the ETFs with the lowest TERs per index. Note that the ETF selection is based on costs and not past performance.

Table 2: Selection of global ETFs for developed countries

Data as provided by fund managers and Justetf.com. This table does not include all relevant information. Date: May 28, 2024.

Which global stock indexes track developing countries?

In many global stock indexes, developing countries are only moderately represented, or are not represented at all. But there are some indexes that focus explicitly on emerging markets.

Table 3: Selection of global indexes for emerging markets

Data as provided by index publishers. Date: May 28, 2024.

There are numerous ETFs that replicate global indexes for developing countries. Table 4 shows that cheapest ETF for each index, as per the TER.

Table 4: Selection of global ETFs and Emerging Markets

Data as provided by fund managers and Justetf.com. This table does not include all relevant information. Date: May 28, 2024.

Which countries are classified as emerging markets?

The terms emerging markets and developing countries are often used synonymously. But in addition to developing countries like Brazil, China, South Africa, and Turkey, most of the indexes that focus on emerging markets also include countries that could by some standards be classified as developed countries. For example, the FTSE Emerging index includes the following countries:

• Qatar
• Kuwait
• Saudi Arabia
• Taiwan
• Czech Republic
• United Arab Emirates

So you should understand that ETFs based on emerging markets also invest in some developed countries. The interpretations of the terms emerging markets and developing countries vary between index publishers.

Is it possible to create a 70/30 portfolio using just one ETF?

No, an ETF that invests in developed and developing countries with an exact ratio of 70-to-30 is not currently available (as per May, 2024). But if you prefer the simplicity of using just one ETF while including at least a rudimentary developing country component in your portfolio, you could, for example, invest in an ETF that tracks the FTSE All-World index. That index includes some developing countries, but their weighting in the index is small.

What are the problems with a 70/30 portfolio?

Investing in securities like stocks and ETFs always involves risks. Returns are never guaranteed and losses can never be ruled out. Additionally, the 70/30 rule has a number of special problems and risks:

• High volatility: The stock prices of companies in developing countries are often more volatile than those of companies in developed countries. If you have a hard time dealing with price fluctuations, then you should reduce the emerging markets component in your portfolio, or eliminate it completely.
• Political risks: Investments in developing countries are often exposed to more political risks. For example, legal structures may be less established than those of many developed countries.
• Poor diversification: While the aim of investing in emerging markets is to diversify your portfolio, China, India, and Taiwan are disproportionately represented in more than half of the well-known emerging market indexes.
• Regular rebalancing: If you want to maintain the 70-to-30 ratio of developed and developing countries in your portfolio, you will need to review your portfolio and rebalance it if necessary. That takes time and may generate costs.

What returns could I earn with a 70/30 portfolio?

A comparison of historical data shows that between 2015 and 2024, a 70/30 portfolio would have delivered lower performance than a global ETF that does not focus on developing countries. Stocks from developed countries have, in the past, yielded higher returns (see Table 5).

Be aware that results can vary depending on the investment term used for the comparison. You should also note that past performance is not a reliable indicator of future performance.

Table 5: Performance comparison of a developed country ETF, a developing country ETF, and a 70-30 investment portfolio

Data source: Justetf.com. Dates: May 28, 2025. May 28, 2024. Performance includes dividends, but does not account for brokerage and custody fees.

Note: The information in this article is provided for educational purposes only, and should not be considered investment advice.

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