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Reports of the death of 60/40 have been greatly exaggerated

The Portfolio Construction and Strategy (PCS) Team at Janus Henderson believes that it is (once again) too early to call time on the classic “60/40" and traditional balanced portfolios. But why? 

Matthew Bullock

Matthew Bullock

EMEA Head of Portfolio Construction and Strategy


Sabrina Denis

Sabrina Denis

Senior Portfolio Strategist


Mario Aguilar De Irmay, CFA

Mario Aguilar De Irmay, CFA

Senior Portfolio Strategist


13 Sep 2023
1 minute read

Key takeaways:

  • There were just four years between 1928 and 2022 when both equity and bond markets fell and in which the returns of balanced allocations subsequently also slipped into the red.
  • Balanced portfolios have the unique characteristic of providing investors with a potentially competitive return during positive market environments and packing an element of fixed income-like protection during selloffs.
  • We on the PCS team believe that a nimble allocation to dynamic, one-stop actively managed multi-asset strategies can help investors to stay true to their long-term objectives.
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The story of balanced portfolios is one of consistency and long-term investment, combining the best of both worlds from equities and bonds. But the scale of market turmoil and uncertainty over the last 18 months, together with a year like 2022 when both bonds and stocks posted double-digit losses, resulted in a loss of confidence in these hybrid investment strategies.

Though there is no guarantee of positive returns each year, those patient investors who retained conviction in balanced strategies have been rewarded with double-digit returns thus far in 2023, despite the ongoing war in Ukraine, sustained inflationary pressures and consequent central bank intervention. This piece gives some insight into why investors should keep in mind how a nimble allocation to actively managed asset allocation strategies can help them to achieve their long-term objectives.

JHI

These are the views of the author at the time of publication and may differ from the views of other individuals/teams at Janus Henderson Investors. References made to individual securities do not constitute a recommendation to buy, sell or hold any security, investment strategy or market sector, and should not be assumed to be profitable. Janus Henderson Investors, its affiliated advisor, or its employees, may have a position in the securities mentioned.

 

Past performance does not predict future returns. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested.

 

The information in this article does not qualify as an investment recommendation.

 

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Matthew Bullock

Matthew Bullock

EMEA Head of Portfolio Construction and Strategy


Sabrina Denis

Sabrina Denis

Senior Portfolio Strategist


Mario Aguilar De Irmay, CFA

Mario Aguilar De Irmay, CFA

Senior Portfolio Strategist


13 Sep 2023
1 minute read

Key takeaways:

  • There were just four years between 1928 and 2022 when both equity and bond markets fell and in which the returns of balanced allocations subsequently also slipped into the red.
  • Balanced portfolios have the unique characteristic of providing investors with a potentially competitive return during positive market environments and packing an element of fixed income-like protection during selloffs.
  • We on the PCS team believe that a nimble allocation to dynamic, one-stop actively managed multi-asset strategies can help investors to stay true to their long-term objectives.