- Investors can benefit from a more deliberate diversification strategy, where traditional asset classes may not “meet the moment,” BlackRock said.
- Expanding beyond a basic 60/40 makes sense because stocks and bonds haven’t had the negative correlation they once enjoyed, chief investment and portfolio strategist Gargi Chaudhuri explained.
The recent market turbulence has highlighted the importance of having a diversified portfolio, according to BlackRock.
For many investors, that means looking beyond a traditional portfolio of 60% stocks and 40% fixed income, the firm said in a recent report.
“Crucially, we believe investors can benefit from a more deliberate diversification strategy, where traditional asset classes may not meet the moment,” the team wrote.
Equities fell on Wednesday after data showed the United States economy contracted in the first quarter, raising concerns about a possible recession. Treasury yields were flat. Yields move inversely to prices.
The moves were just the latest in the market’s ups and downs as investors consider President Donald Trump’s trade policy and ensuing tariff negotiations.
Expanding beyond a basic 60/40 makes sense because stocks and bonds haven’t had the negative correlation they once enjoyed — where bonds would provide a ballast if stocks tanked, said Gargi Chaudhuri, chief investment and portfolio strategist at BlackRock. Not only that, there has been an increasingly positive correlation, she said.
For instance, earlier this month stocks sank and bond yields rose, particularly on the longer end of the curve, Chaudhuri pointed out. That’s led to a lot of clients asking, “what else?” she said.
″[When] rethinking your 60/40, I think the starting place is important,” Chaudhuri said. “What type of portfolio you’re trying to build of that 60 — what part is in U.S. versus international,” she added. “Of the 40, what part is in something traditional like an [iShares Core US Aggregate Bond ETF] AGG versus more shorter-duration, income-seeking solutions.”
Source: https://www.cnbc.com/2025/04/30/blackrock-says-investors-can-profit-from-diversifying-beyond-the-60/40-amid-volatility-.html