EDOW - The 60/40 Portfolio: Still A Viable Strategy?

2024-03-06 06:10:00 ET

Summary

• The traditional 60/40 portfolio strategy has faced challenges due to rate hikes and low expected returns.
• AQR Capital Management believes that the 60/40 approach can still provide reasonable returns in a low-interest-rate environment.
• The value opportunity in stocks, particularly low-multiple stocks, has improved but remains wide compared to historical levels.

The 60/40 balanced portfolio has been a key investment strategy for years. As rates have risen, the effectiveness of the structure has come into question. Cliff Asness, Founder, Managing Principal and Chief Investment Officer at AQR Capital Management, says the traditional approach can still provide opportunities for investors.

Transcript

Greg Bonnell - Aggressive central bank rate hikes put the traditional 60/40 portfolio strategy into question in recent years. But with the prospect of lower interest rates ahead, is the 60/40 making a comeback? I had a chance to discuss that with noted hedge-fund manager Cliff Asness, Managing and Founding Principal and Chief Investment Officer at AQR Capital. And we started that discussion by talking about how his firm's strategy works....

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