This is a sponsored advertorial from PIMCO.

Learn how our 60/40 strategy uses global diversification and stock-bond dynamics to help investors thrive in uncertain markets.

In today’s unpredictable markets, the classic 60/40 portfolio – 60% stocks, 40% bonds – remains a cornerstone for investors seeking both growth and stability. Yet, headlines questioning “is the 60/40 portfolio dead?” have become common, especially after inflation spiked in 2022 and the traditional negative stock–bond correlation broke down, causing both asset classes to fall sharply. 

At PIMCO, we believe the 60/40 investment strategy is not only alive, but more relevant than ever – especially when enhanced with global diversification and active management. 

Why 60/40 now?

Despite the pain of 2022, the 60/40 portfolio has proven its resilience over more than 30 years. Our data shows that since 1990, a global 60/40 portfolio has delivered returns just 0.6% below global equities on an annualised basis, but with about 37% less volatility¹.

Importantly, the negative correlation between stocks and bonds has recently re-emerged as inflation in many developed markets moves closer to central bank targets, supporting the case for attractive diversification and return potential in the future.

The long-term track record and easy-to-understand benefits of a 60/40 allocation also allow investors to stay invested through market cycles, avoiding the pitfalls of emotional decision-making during market swings, which often leads to underperformance.

Recent independent research further reinforces the case for 60/40. Morningstar’s 150-year stress test shows that, even during rare periods when stocks and bonds fall together, the 60/40 mix has provided a compelling balance of risk and return, remaining a robust core allocation even during episodes of market stress.

Figure 1: During meaningful equity drawdowns, bonds have delivered positive returns and diversified to a greater degree during recessions

PIMCO’s approach: An innovative take on 60/40

We believe three key differentiators set our 60/40 strategy apart from traditional balanced strategies:

• Systematic equity investing: We take a disciplined, data-driven approach to global equity selection, leveraging advanced quantitative techniques and proprietary signals. This helps diversify across regions, sectors, and styles, reducing concentration risk and seeking more consistent returns.
• Flexible multi-sector fixed income: Our expertise across global bond markets enables us to tap into a vast universe of high-quality, diversified income sources, flexibly allocating across sectors to manage risk and pursue stable income, even in challenging environments. 
• Macro-driven tactical adjustments: We actively adjust exposures on the margin based on economic data, allowing the portfolio to respond to market disruptions such as inflation spikes or slowing growth.

Private assets: Enhancement, not replacement

While some investors are exploring alternatives to the 60/40 portfolio, we take a measured view. Although private assets may enhance diversification, the classic 60/40 portfolio continues to prove its value as a long-run portfolio anchor, even without the inclusion of private investments.

Public fixed income, in our view, remains a valuable diversifier to equity risk in a balanced portfolio. The negative stock-bond correlation has reasserted itself, and today’s higher starting yields provide a meaningful cushion during risk-off events. Historically, bond yields have been closely linked to five-year forward returns, offering compelling forward-looking return potential.

A sensible approach for today and tomorrow

In an uncertain world, investors need strategies that adapt and endure. PIMCO’s 60/40 strategy offers a robust, diversified framework – rooted in the time-tested 60/40 philosophy and enhanced by global reach, systematic insights, and modest tactical agility.

For those navigating volatility and seeking long-term success, the 60/40 portfolio is not only alive – it’s thriving.

Learn more here.

 

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1 As of 31 March 2025. Source PIMCO, Bloomberg. Data since 1/31/1990. For illustrative purposes only. Past performance is not a guarantee or a reliable indicator of future results. 60/40 Portfolio is represented by 60% MSCI ACWI / 40% Bloomberg US Aggregate. US Bonds are represented by the Bloomberg US Aggregate Index. Global Stocks are represented by the MSCI ACWI Index. Returns are shown gross since it is not possible to invest directly in an unmanaged index. There is no guarantee that the trends mentioned above will continue. Statements concerning financial market trends are based on current market conditions, which will fluctuate.

Important information

All investments contain risk and may lose value. Investing in the bond market is subject to risks, including market, interest rate, issuer, credit, inflation risk, and liquidity risk. Forecasts, estimates and certain information contained herein are based upon proprietary research and should not be interpreted as investment advice, as an offer or solicitation, nor as the purchase or sale of any financial instrument. Forecasts and estimates have certain inherent limitations, and unlike an actual performance record, do not reflect actual trading, liquidity constraints, fees, and/or other costs. In addition, references to future results should not be construed as an estimate or promise of results that a client portfolio may achieve.

Charts are provided for illustrative purposes and are not indicative of the past or future performance of any PIMCO product References to specific investments are for illustrative purposes only and are not intended to be, and should not be interpreted as, recommendations to purchase or sell such securities. This material is provided for information purposes only and should not be considered as investment advice or a recommendation of a particular security, strategy or investment product. This material contains the opinions of the manager, and such opinions are subject to change without notice. Statements concerning financial market trends or portfolio strategies are based on current market conditions, which will fluctuate. There is no guarantee that these investment strategies will work under all market conditions or are appropriate for all investors. Individual investors should contact their own financial professional to determine the most appropriate investment options for their financial situation and each investor should evaluate their ability to invest for the long term, especially during periods of downturn in the market. Outlook and strategies are subject to change without notice.

Issued in Singapore by PIMCO Asia Pte Ltd (Registration No 199804652K). Issued in Hong Kong by PIMCO Asia Limited and this material has not been reviewed by the Securities and Futures Commission. All investments contain risks and may lose value. PIMCO is a trademark of Allianz Asset Management of America LLC in the United States and throughout the world. ©2025, PIMCO.

CMR2025-0911-4806900

This is a sponsored advertorial from PIMCO.