60/40 Portfolio: backtest, returns and drawdowns
Sixty percent stocks, forty percent bonds: the reference point most other allocations are measured against.
Data updated October 2026
Created by: Classic balanced allocation
Allocation
| Asset class | ETF used in the backtest | Weight |
|---|---|---|
| US total stock market | VTI | 60% |
| US aggregate bonds | BND | 40% |
From June 2020 to October 2026 the 60/40 Portfolio returned 10.0% a year on average, with annual volatility of 11.0%. Its deepest fall was 21.6%, from December 2021 to October 2022, recovered in about 26 months.
Its best year was 2023 (+17.9%) and its worst 2022 (−17.0%).
Over the same period 100% US stocks returned 16.8% a year with a maximum fall of 25.4%.
Key figures
- Annual return (CAGR)
- +10.0%
- Annual volatility
- 11.0%
- Maximum drawdown
- −21.6%
- Recovery time
- 26 months
- Sharpe
- 0.67
- Sortino
- 0.95
- Worst year
- 2022: −17.0%
- Positive years
- 4/5
Growth of $10,000
Drawdowns
Returns by calendar year
| Year | 60/40 Portfolio | 100% Stocks |
|---|---|---|
| 2026(partial) | +8.0% | +14.7% |
| 2025 | +13.1% | +17.1% |
| 2024 | +14.8% | +23.8% |
| 2023 | +17.9% | +26.1% |
| 2022 | −17.0% | −19.5% |
| 2021 | +14.6% | +25.7% |
| 2020(partial) | +16.5% | +26.4% |
How it works
Stocks provide long-term growth; bonds dampen volatility and have often, though not always, risen when stocks fell.
Backtest with total-return ETF prices (dividends reinvested), rebalanced to target weights on the first trading day of each year. No fees, taxes or currency effects; first and last years are partial. Past results do not predict future returns.
Questions
What is the 60/40 Portfolio?
Sixty percent stocks, forty percent bonds: the reference point most other allocations are measured against. Allocation: 60% us total stock market, 40% us aggregate bonds. Created by: Classic balanced allocation.
What is the 60/40 Portfolio return?
In the backtest from June 2020 to October 2026 it returned 10.0% a year on average, with a maximum drawdown of 21.6%. US dollars, before fees and taxes.
How often should it be rebalanced?
The backtest rebalances once a year back to the target weights. Rebalancing more often changes little and adds costs; some investors rebalance only when a weight drifts beyond a threshold.
What was the worst drawdown of the 60/40 Portfolio?
21.6%, from December 2021 to October 2022; it took about 26 months to get back to the previous high.
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- Versione italiana
Source: MarketStack end-of-day prices. Historical and educational content: not a forecast and not investment advice. MEDGE Capital does not recommend buying or selling any instrument. Risk disclaimer.