Classic 60/40
Sixty percent in the S&P 500 and forty percent in the US bond market: the balanced portfolio most others are measured against.
A long-standing balanced benchmark; no single designer.
Before the numbers. A hypothetical backtest, not a forecast: Jun 30, 2000 to Oct 9, 2026 (26.2 years), the window every published portfolio shares. Rebalanced once a year at 10 basis points a trade. The bar is the three-fund at the same stock share, 60%.
Funds younger than the window are extended by older series, each junction validated (how): BND by VBMFX before 2007-04-10; VOO by VFINX before 2010-09-09.
What it holds
| Asset class, and the fund this backtest holds it through | Weight | Fund fee |
|---|---|---|
| US large-cap blend VOO · Vanguard S&P 500 |
60% | 0.03% |
| US total bond market BND · Vanguard Total Bond Market |
40% | 0.03% |
| Together | 100% | 0.03% |
The funds are the ones this backtest uses for each asset class, not a list to buy: any fund tracking the same asset class holds the same thing.
Its record against the three-fund at 60% stocks
| Statistic | Classic 60/40 | Three-fund at 60% stocks |
|---|---|---|
| Value per $10,000 | $58,942 | $51,136 |
| Total return | 489.42% | 411.36% |
| Annual return (CAGR) | 6.98% | 6.41% |
| Standard deviation | 9.30% | 9.57% |
| Max drawdown | -33.79% | -35.82% |
| Worst calendar year | -19.47% | -21.15% |
| Longest time underwater | 877 days | 831 days |
| Ulcer Index | 7.58% | 8.03% |
| Sharpe ratio | 0.57 | 0.50 |
| Sortino ratio | 0.85 | 0.73 |
| Ulcer Performance Index | 0.68 | 0.57 |
The crises
| Deepest decline from a prior peak | Classic 60/40 | Three-fund at 60% stocks |
|---|---|---|
| 2000–02 | -24.6% | -23.8% |
| 2008 | -33.8% | -35.8% |
| 2020 | -21.2% | -21.3% |
| 2022 | -20.9% | -22.4% |
2000–02 is measured from June 2000, the window's start, after the March peak; 2008 from October 2007 to June 2009; 2020 from February to April; 2022 through 2023.
Calendar years
The first and last years are partial.
The trade-off
It is the long-standing benchmark for a balanced portfolio, with no single designer. The bonds are the whole US investment-grade market, Treasuries and corporate bonds together, and the stocks are the 500 largest US companies.
Compared with the three-fund at the same 60%, it holds no international stocks. Over this window it returned 6.98% a year against 6.41% for the three-fund, with a worst decline of -33.8% against -35.8%. A window in which international stocks led would read differently.