An alternative to the classic 60/40 portfolio is having its best stretch in 30 years. Here's how to replicate it.
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- The "permanent portfolio" is seeing its best decade since the 90s, Bank of America says.
- The portfolio's 2025 performance returned 23%, the best year since 1979.
- Consider ETFs for exposure to this alternative to the classic 60/40 portfolio mix.
Bank of America says there's a strong alternative to investors looking to shake up the traditional 60/40 portfolio.
The so-called "permanent portfolio" — 25% stocks, 25% bonds, 25% gold, and 25% cash — is having its best 10-year stretch since the early 1990s, the bank said in a note on Friday.
Over the last decade, it has delivered an average annual return of 8.7%.
Bank of America
What's more, 2025 was the portfolio's best single year since 1979, with gains of 23%.
Bank of America
It's not hard to see why the portfolio has done so well. Last year, the S&P 500 rose 15%, 10-year Treasury yield dropped from around 4.7% to 4.2%, gold shot up by 65%, and cash-equivalent investments like short-term Treasury notes yielded between 3.8% and 4.3%.
In the last week or so, parts of the portfolio have been having a rocky ride, mainly gold. The precious metal's price dropped 12% in a day on Friday. Yet, gold is still green year-to-date, and stocks have also edged higher.
There are several ways to gain exposure to the assets in the permanent portfolio. One is through exchange-traded funds. Examples of funds one could buy to build such a portfolio include the SPDR S&P 500 ETF Trust, the BondBloxx Bloomberg Ten Year Target Duration US Treasury ETF (XTEN), SPDR Gold Trust (GLD), and the iShares 0-3 Month Treasury Bond ETF (SGOV).
Other firms have also recommended alternatives to the time-tested 60/40. Earlier this month, Vanguard suggested simply to flip the allocation and put 60% of your cash into bonds and 40% into stocks. The investment management giant has been bullish on fixed income in the last year.
In August, it said investors should consider allocating as much as 70% to bonds amid predictions for lackluster returns in stocks over the coming years.