Vanguard flips the script on 60/40 investment strategy
Vanguard is singing a new tune for investors in 2026.
It goes like this: Out with the standard portfolio mix of 60% equity and 40% fixed income. In with the opposite — a 40% equity share (20% US stocks and 20% international stocks) and 60% fixed income.
“This is a significant shift,” Roger Aliaga-Diaz, Vanguard’s global head of portfolio construction and chief economist for the Americas, told me. “It’s almost like a tectonic shift.”
Here’s what’s behind it.
Vanguard expects investors in the short term to realize returns from high-quality (both taxable and municipal) US and foreign bonds similar to the performance they would see from US equities — about 4% to 5% — but with lower risk.
Aliaga-Diaz also…
