The Performance of the 60/40 Portfolio: A Historical Perspective

Report Overview

This report explores the importance of asset allocation in shaping long-term investment returns, focusing on the widely used 60/40 equity/bond portfolio model. While the strategy has been a longtime cornerstone for pension funds and long-term investors, shifting economic conditions may present challenges to its continued effectiveness.

“The Performance of the 60/40 Portfolio: A Historical Perspective” is the first of a two-report series. The second report will assess the 60/40 strategy’s future viability.

The report leverages the Dimson–Marsh–Staunton (DMS) Global Investment Returns database, which provides data since 1900 on stocks, Treasury bills, bonds, inflation, and exchange rates across 35 countries. The key markets analyzed are Australia, Japan, the United Kingdom, and the United States, with references to European and global indices for benchmarking. The report examines the performance of the 60/40 portfolio in these markets from 1901 to 2022.

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