Classic 60/40
Allocate 60% to SPY (S&P 500, US large-cap equities). Current signal: Static. Backtest max drawdown: -65.8%.
Current allocation
Classic 60/40
Current allocation is not available yet for this variant. Preview signals are shown separately in Signals.
Allocate 60% to SPY (S&P 500, US large-cap equities). Current signal: Static. Backtest max drawdown: -65.8%.
Based on research by Traditional
This is BestFolio's independent implementation. Not affiliated with or endorsed by the original author.
About this Strategy
The Classic 60/40 portfolio is the most widely referenced balanced allocation in finance, splitting 60% into US equities and 40% into US aggregate bonds. It has served as the default benchmark for balanced portfolios for decades. The logic is straightforward: equities provide long-term growth while bonds provide income and can dampen volatility, although stocks and bonds can fall together when inflation and interest rates rise. The allocation stays invested without a momentum exit or cash fallback. Its main advantages are two transparent sleeves and a simple rebalancing discipline; its main limitation is exposure to both equity losses and bond duration risk. Use it as a comparison baseline on the same dates as a tactical portfolio, including costs and drawdowns, rather than comparing headline returns from different histories.
Strategy Rules
- 1Allocate 60% to SPY (S&P 500, US large-cap equities)
- 2Allocate 40% to AGG (Bloomberg US Aggregate Bond Index)
- 3Rebalance annually or when drift exceeds threshold
Asset Universe
2 instruments this strategy can hold
Key Differentiators
Research Source
Based on research by Traditional
Strategy Info
- Type
- Fixed / Strategic
- Frequency
- annual
- Next Rebalance
- Jan 409:30 ET (110d)
- Variants
- 1
- Risk Category
- moderate
- Regime
- Static
- Signal Date
- 2026-09-15
- Tags
- static, benchmark
- Type
- Fixed/Strategic Asset Allocation
- Trading Frequency
- Annual or on-drift rebalancing
- Number Of Holdings
- 2 ETFs
- Equity Allocation
- 60%
- Bond Allocation
- 40%
- Risk Level
- Moderate
Asset Classes
Research and methodology
Allocate 60% to SPY (S&P 500, US large-cap equities). Current signal: Static. Backtest max drawdown: -65.8%. This is a fixed-allocation portfolio. BestFolio supplies the public rule or approach, current signal and allocation, and interactive backtest views on this page. Users review the published signal and place any resulting trades in their own brokerage. Displayed returns remain hypothetical and do not represent a customer's brokerage record. The dates below identify the available data and the next scheduled review.
- Cadence:
- Annual
- Data through:
- Backtest data through 2026-09-15; latest signal date 2026-09-15.
- History boundary:
- Backtest simulation only; no live publication yet
- Published result:
- Engine daily-reset-v1, data version e6d0a491, published 2026-09-10
- Rule / approach
- Allocate 60% to SPY (S&P 500, US large-cap equities); Allocate 40% to AGG (Bloomberg US Aggregate Bond Index); Rebalance annually or when drift exceeds threshold.
- BestFolio supplies
- The annual signal email and this strategy page.
- Customer action
- Place any required trades in your own brokerage at the next open on Jan 4, 2027. BestFolio does not execute orders.
- Costs and exclusions
- Backtests are net of a modeled one-way transaction cost (10 bps, scaled up to 3x under stress); taxes, fund-expense drift, or market impact are not modeled. No tax, no slippage beyond the stated cost. Methodology limitations
- Freshness
- Signal data cutoff Sep 15, 2026 close. Backtest data through 2026-09-15; latest signal date 2026-09-15.
- Next expected action
- Next review Jan 3, 2028 at the open (09:30 ET). Review the published signal before placing any trade.
Is Classic 60/40 still working in 2026?
Classic 60/40 returned 9.30% over the trailing 12 months and 49.13% over 36 months through 2026-09-15, compared with a full-backtest annualized return of 8.03%. Its full-backtest maximum drawdown was -65.75%. The full sample contains 26506 daily NAV observations from 1922-12-29. These are model results, not investor account returns or a promise. Recent returns do not establish that the strategy will keep working.
| Period | Return | CAGR | Max drawdown | Observations | Dates |
|---|---|---|---|---|---|
| Trailing 12 months | 9.30% | Not annualized | -5.86% | 252 | 2025-09-15 to 2026-09-15 |
| Trailing 36 months | 49.13% | Not annualized | -11.27% | 752 | 2023-09-15 to 2026-09-15 |
| Full backtest | 301047.11% | 8.03% | -65.75% | 26506 | 1922-12-29 to 2026-09-15 |
Last verified
Are these live investor returns?
No. These are the latest model NAV results from the published backtest. A recent date alone does not make a result an independently observed live record. Investor costs, taxes and execution can differ.
Why can a strategy lag for a year?
A tactical model can hold defensive assets during a rally or change positions during reversals. A short window can differ substantially from its full history. Compare cumulative returns over matching dates and inspect drawdowns as well.
Where can I check the signals behind these results?
The Signal History card on this strategy page shows dated model decisions for the selected variant, subject to its access tier. The methodology page explains the backtest assumptions.
Classic 60/40 at a glance
Classic 60/40 is a fixed-allocation portfolio by Traditional across US Equity, US Bonds, rebalanced annual. Backtested 1922-12-29 to 2026-09-15 (103.7 years): 8.0% CAGR, 0.73 Sharpe, -65.8% max drawdown, 7.7% volatility.
- Type
- Fixed Allocation
- Author
- Traditional
- Rebalancing
- Annual
- Risk
- Moderate
- Period
- 1922-12-29 to 2026-09-15
- CAGR
- 8.0%
- Sharpe
- 0.73
- Max Drawdown
- -65.8%
- Volatility
- 7.7%
Classic 60/40 — Fixed Allocation Portfolio
The Classic 60/40 portfolio is the most widely referenced balanced allocation in finance, splitting 60% into US equities and 40% into US aggregate bonds. It has served as the default benchmark for balanced portfolios for decades. The logic is straightforward: equities provide long-term growth while bonds provide income and can dampen volatility, although stocks and bonds can fall together when inflation and interest rates rise. The allocation stays invested without a momentum exit or cash fallback. Its main advantages are two transparent sleeves and a simple rebalancing discipline; its main limitation is exposure to both equity losses and bond duration risk. Use it as a comparison baseline on the same dates as a tactical portfolio, including costs and drawdowns, rather than comparing headline returns from different histories.
Classic 60/40: frequently asked questions
- What is Classic 60/40?
- The benchmark for balanced portfolios: 60% US stocks, 40% US bonds. Every other allocation is measured against this.
- Who created the Classic 60/40 strategy?
- Classic 60/40 was developed by Traditional.
- What is the historical return and maximum drawdown of Classic 60/40?
- Backtested from 1922-12-29 to 2026-09-15, Classic 60/40 returned 8.0% CAGR with a -65.8% maximum drawdown and a Sharpe ratio of 0.73. Past performance does not guarantee future results.
- How often is Classic 60/40 rebalanced?
- Classic 60/40 is rebalanced annual. BestFolio publishes the updated allocation signal each period.
- Is Classic 60/40 a fixed or tactical strategy?
- Classic 60/40 is a fixed-allocation (strategic) portfolio: it holds a set allocation and rebalances on schedule rather than rotating based on market signals.
Backtest Performance (1922-12-29 to 2026-09-15)
| Metric | Classic 60/40 |
|---|---|
| CAGR | 8.0% |
| Max Drawdown | -65.8% |
| Sharpe | 0.73 |
| Sortino | 1.15 |
| Volatility | 7.7% |
| Calmar | 0.12 |
| Total Return | 300569.3% |
| Backtest Period | 103.7 years |
Strategy Details
- Type
- Fixed / Strategic
- Rebalancing
- annual
- Risk Level
- moderate
- Variants
- 1
- Author
- Traditional
Asset Classes
- US Equity
- US Bonds
Further reading
Holding Classic 60/40 alongside another strategy? Use the free portfolio overlap calculator to see how much of the two portfolios actually differs.
Track Classic 60/40 in Your Portfolio
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