BlackRock vs. Vanguard: The world's biggest asset managers don't see eye to eye on the classic 60/40 investment strategy.
BlackRock and Vanguard – both of which manage over $8 trillion worth of assets – are split on the strategy, in which investors allocate 60% of their portfolio to stocks and the other 40% to bonds.
The two marquee investing names are at odds with each other on whether last year's trend was an outlier or a sign that the 60/40 split is no longer the best way to build a portfolio.
"Equities did a large part of the work over the past 10 years because of the bull market we've been in," Schlanger said."Now there can be a more balanced outlook for equities and bonds, due to higher interest rates and higher yields within fixed income."BlackRock is calling time on a simple, static 60/40The world's largest asset manager still expects the balanced portfolio to deliver returns of around 7.
Paul added that while the 60/40 portfolio delivered steady returns in the calmer years between the financial crisis and the start of 2022, investors will need to be more flexible in a period where the Federal Reserve is more focused on crushing price pressures than propping up valuations.', characterized by stable growth and inflation," he said."The difference is that we think these two things will not be comparatively stable and there's going to be more of a trade-off.
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