Exceptional return/risk ratio of inbestMe bond portfolios as of June 2025

At inbestMe, we currently offer a complete range of Bond Portfolios. These are portfolios composed 100% of fixed income instruments. Previously, bonds were used in our portfolios mainly to diversify equity risks, and a 100% bond portfolio was allocated only to very conservative investors.

After the rise in official interest rates and yields in recent years, we have seen renewed interest in bond investing from our clients, and not just from the very risk-averse. This prompted us to complete our offering of bond portfolios.

In November 2022, we launched savings portfolios built with money market instruments. These have proven to be a perfect way to park liquidity when rates rise without incurring price drops, as is the case with other bonds. When interest rates rise, bond prices fall, and the longer the bond’s maturity, the greater the loss in price terms. This does not happen with money market funds due to their extremely short duration.

When interest rates began to stabilize, in September 2023 we introduced a Conservative Bond Portfolio as a new alternative for the less risk-averse investor, made up entirely of high credit quality bonds, which allowed the client to invest in instruments with slightly longer durations, but still very low risk.

Subsequently, we added an Aggressive Bond Portfolio, designed for investors who prefer fixed income but are willing to take on greater risk. With a longer duration and a higher expected return, this portfolio offers a more dynamic alternative within the fixed income universe.
In summary, we now have three portfolios composed of fixed income instruments, in addition to the target portfolios more focused on predefined maturities:

• Savings Portfolio: designed to hold liquidity or an emergency fund and obtain a return close to official interest rates, with extremely low volatility.
• Conservative Bond Portfolio: for investing in short-maturity bonds with limited interest rate risk.
• Aggressive Bond Portfolio: for investing in higher-risk bonds, but with higher expected returns.

The investor should expect somewhat different behavior from these portfolios, as seen in the historical comparative chart (in the euro version).

In the Savings Portfolio, returns accumulate at a rate nearly equal to the official interest rates set by central banks. Movements are very gradual and volatility is extremely limited. The “risk” is that these rates may fall and interest will accumulate more slowly, but there is no price risk, due to the inverse relationship between yields and prices.

The Conservative Bond Portfolio shows higher volatility than the Savings Portfolio, although still contained, while the Aggressive Bond Portfolio is for investors who can tolerate higher volatility (but still lower than that of equities).

For this higher assumed risk, they are rewarded with a higher expected long-term return.

Bond portfolio returns in euros in line with expectations

The Conservative Bond Portfolio in euros has accumulated a return of 6.9%, or 3.8% annual equivalent rate (TAE), both above the benchmark index, which stands at 5.8% or 3.3% respectively, beating it by 1.1 matching the benchmark.

The Aggressive Bond Portfolio has accumulated a clearly superior return of 8.3%, or 4.6% TAE, in this case very much in line with the benchmark index (-0.2 percentage points for both the cumulative return and TAE). During 2025, this portfolio has been more subject to interest rate volatility, as seen in the chart, being negative at certain moments.

Let’s remember: Why should an investor invest in the Aggressive Bond Portfolio, whose price is more volatile?

Basically, higher risk means higher expected return. In addition, now that central banks have started to lower official interest rates, the bolder portfolio has a longer duration and will benefit more if yields fall in the future. If, on the contrary, yields rise, the interest received annually will act as a kind of cushion against price losses.

Bond portfolio returns in dollars in line with expectations

The conservative dollar bond portfolio has accumulated a significantly higher return than the euro bond portfolio due to the US interest rate level of 9.1% or 5.3% APR, both above the benchmark index, which stands at 8% or 4.5% respectively, exceeding it by 1.7 percentage points or 0.8 in annualized terms. Through 2025, it has accumulated a return of 2.5%, 2.4 percentage points above the benchmark.

The Aggressive Bond Portfolio in dollars has accumulated a clearly higher return of 14%, or 7.6% TAE, clearly outperforming the benchmark index by +5.6 percentage points in cumulative return and +2.9 points in TAE.

During 2025, this portfolio has also performed very well after overcoming April’s volatility and has accumulated 5% so far this year, which is 3.5 percentage points more than the benchmark, which remained at 1.5%.

Excellent risk-return ratio of our bond portfolios

The bond portfolios in euros show very efficient management of the return-risk relationship, with the Conservative Bond Portfolio standing out in particular, with a Sharpe Ratio of 4.31—an exceptional figure that reflects a very high return per unit of risk taken (with a volatility of only 0.7%).

For its part, the Aggressive Bond Portfolio has achieved a higher cumulative return since September 2023 (8.3%), but has done so with much higher volatility (4.3%) and a more modest, though still excellent, Sharpe Ratio of 0.88.

In the dollar portfolios, the Conservative Portfolio again stands out for its excellent balance, with a Sharpe Ratio of 2.52 and very contained volatility of 1.2%, reflecting a very solid return per unit of risk. The Aggressive Portfolio, while more profitable again in absolute terms, shows significantly higher volatility (6.2%) and a Sharpe Ratio similar to its euro counterpart (0.84).

This high efficiency in the return-risk relationship shows that our bond portfolios are an excellent option for those investors who, without taking on excessive risk, seek returns superior to those of a traditional savings portfolio.