Jurrien Timmer, Global Macro Director at Fidelity, has suggested that the traditional 60/40 portfolio split between stocks and bonds has been replaced by a new 60/20/20 model. According to Timmer, the updated allocation consists of 60% equities, 20% bonds, and 20% alternative assets.
He noted that this shift took effect following the pandemic and stated he sees no current reason to alter the approach. For decades, the 60/40 setup served as the default strategy, making the allocation of a fifth of a portfolio to alternatives a significant departure from standard practice.
In Timmer's updated model, the 20% alternative assets category encompasses gold, commodities, cash, Bitcoin, real estate investment trusts (REITs), and managed futures.
Timmer highlighted Bitcoin's statistical characteristics within the framework, noting that its correlation with the S&P 500 stands at 30%, while it exhibits no correlation with U.S. Treasury bonds. This lack of movement in direct step with traditional stocks and bonds supports its function as a portfolio diversifier.
At the same time, Timmer clarified that the model does not represent an optimized portfolio. He described it as a rough example of how assets could be divided and emphasized that it should not be interpreted as investment advice.
