Over the past decade, Morningstar’s 60/40 portfolio—split between U.S. equities and investment-grade bonds—generated a 9.55% total return versus 8.19% for the firm’s diversified test portfolio. Extending the horizon to 20 years, the 60/40 model delivered a 9.68% return while the diversified approach yielded 7.13%, underscoring persistent outperformance by the traditional allocation.

In 2025, Morningstar’s diversified test portfolio—which included allocations to U.S. large- and small-cap stocks, international equities, Treasuries, global bonds, high-yield debt, commodities, gold and REITs—returned 18.3%, outperforming the plain 60/40 model by 500 basis points. It also bested the U.S. Market portfolio’s 17.35% gain and far outpaced the U.S. core bond portfolio’s 7.12% result.

Researchers caution that adding volatile asset classes like private equity, private credit and cryptocurrency can erode long-term returns despite low short-term correlations. High-quality bonds—particularly U.S. Treasuries and agency mortgages—and international equities are highlighted as efficient diversifiers, given their historical negative or low correlation with U.S. stocks and their capacity to deliver positive returns during market downturns.