ETF Trends: Why the 60/40 Portfolio Needs a New Playbook
- May 19
- 1 min read
The 60/40 portfolio doesn't just need a tweak. It needs a different set of assumptions.
CIO of Global Macro David Aspell and CIO of Managed Futures and COO Jerry Prior told DJ Shaw at ETF Trends that most advisors reaching for diversification through private equity are getting something else.
"All that's happening is that the 20 going from bonds into alternatives is going into private equity, and they're giving you an expensive version of the 60 you've already got," Dave said.
The structural problem runs deeper. The 60/40 model depends on a negative correlation between stocks and bonds — a relationship that held for four decades and broke down in 2022.
Jerry noted, "Equity markets hate when correlations go to one. That's their weakness and that's our strength."