60/40 Portfolio Bounces Back From 2022 Slump: Is It The Right Investment Strategy For 2024?
Portfolio Pulse from Piero Cingari
The 60/40 investment portfolio, benchmarked by the iShares Core Growth Allocation ETF (AOR), has rebounded with a 13% growth in 2023 after a slump in 2022. The portfolio's performance is contingent on the Federal Reserve's interest rate decisions in 2024. Other ETFs that can be used to construct a 60/40 portfolio include SPY, TLT, VT, AGG, ACWI, BNDX, IVV, BND, VTI, and BNDW.
December 28, 2023 | 1:42 pm
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POSITIVE IMPACT
ACWI, offering global equity exposure, is an alternative for the stock component of a 60/40 portfolio and may be affected by the same macroeconomic factors as AOR.
ACWI's role as a global equity ETF in a 60/40 portfolio means it could be impacted by the same economic and interest rate considerations as AOR.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 70
POSITIVE IMPACT
AGG, which tracks the U.S. Aggregate Bond Index, is suggested for the bond side of a 60/40 portfolio and may experience similar impacts as AOR due to rate cut expectations.
As AGG is part of the bond strategy in a 60/40 portfolio, its performance is tied to interest rate trends and the bond market's health, similar to AOR.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 70
POSITIVE IMPACT
The iShares Core Growth Allocation ETF (AOR) has seen a significant rebound in 2023 with a 13% growth, marking a strong recovery from the previous year's downturn.
AOR's rebound is significant as it benchmarks the 60/40 portfolio. Its performance is directly tied to the strategy's success and investor sentiment towards balanced portfolios.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
POSITIVE IMPACT
BND, offering diversified U.S. bond market exposure, is recommended for the bond side of a 60/40 portfolio and may experience similar impacts as AOR due to interest rate expectations.
BND's role in the bond portion of the 60/40 portfolio means it is likely to be influenced by the same interest rate trends that affect AOR's performance.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 70
POSITIVE IMPACT
BNDW, providing a globally diversified bond exposure, is suggested for the bond side of a 60/40 portfolio and may experience similar impacts as AOR due to rate cut expectations.
As BNDW is part of the bond strategy in a 60/40 portfolio, its performance is tied to interest rate trends and the bond market's health, similar to AOR.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 70
POSITIVE IMPACT
BNDX, focusing on non-U.S. bonds, is part of the bond strategy for a 60/40 portfolio and may see similar impacts as AOR, especially if global bond markets react to U.S. rate changes.
BNDX's performance as an international bond ETF could be affected by U.S. interest rate policies, which also influence the 60/40 portfolio strategy represented by AOR.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 70
POSITIVE IMPACT
IVV, similar to SPY in tracking the S&P 500, is a component of some 60/40 portfolios and may be impacted by the same factors driving AOR's performance.
IVV's correlation with the S&P 500 makes it susceptible to the same economic conditions that affect AOR and the overall 60/40 portfolio strategy.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 70
POSITIVE IMPACT
SPY, which tracks the S&P 500 Index, is part of a suggested pairing for a 60/40 portfolio and may benefit from the same trends that have favored the AOR ETF.
SPY is a popular choice for the stock portion of the 60/40 portfolio and is likely to be influenced by the same macroeconomic factors affecting AOR.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
TLT, focusing on long-term U.S. Treasury bonds, is recommended for the bond portion of a 60/40 portfolio and may see an impact similar to AOR's due to interest rate expectations.
TLT's performance is closely related to interest rate movements and the health of the bond market, which are factors in the 60/40 portfolio's success.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
VT, providing global stock market exposure, is another option for the equity side of a 60/40 portfolio and may be influenced by the same factors as AOR.
VT's global exposure makes it a candidate for the stock portion of the 60/40 portfolio, potentially affected by the same economic conditions as AOR.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 70
POSITIVE IMPACT
VTI, providing exposure to the entire U.S. stock market, is an option for the equity side of a 60/40 portfolio and may be influenced by the same factors as AOR.
VTI's broad market exposure makes it a candidate for the stock portion of the 60/40 portfolio, potentially affected by the same economic conditions as AOR.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 70