Is the era of the traditional 60/40 portfolio over? Portfolios with a classic split of 60% equities and 40% bonds delivered their worst performance since 1999 last year, losing 17% of their value, the Financial Times reports citing BlackRock data. Premised on the assumption that when stocks go down, bonds go up (and vice versa), the so-called balanced portfolio is designed to minimize risk. That theory was broken in 2022, as surging inflation and interest rates exacted a toll on both asset classes.

Don’t expect a comeback anytime soon: More than half of institutional investors surveyed by asset manager Amundi and consultancy Create Research think 60/40 portfolios will continue to underperform this year. “We’re not anticipating performance in 2023 will be as bad as 2022 . . . but the broader point is you can do better than 60/40 with a similar risk profile,” BlackRock’s Vivek Paul tells the FT.

So what’s the alternative? “The changes in market regime amount to two things: focus on the short term and focus on opportunism,” says Create Research’s Amin Rajan. Analysts are recommending portfolios with more asset diversity and a higher proportion of inflation-linked bonds, and private assets.

	EGX30	15,528	+0.4% (YTD: +6.4%)
	USD (CBE)	Buy 29.63	Sell 29.76
	USD at CIB	Buy 29.65	Sell 29.75
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THE CLOSING BELL-

The EGX30 rose 0.4% at yesterday’s close on turnover of EGP 4.4 bn (171% above the 90-day average). Local investors were net sellers. The index is up 6.4% YTD.

In the green: Orascom Construction (+8.2%), Cleopatra Hospitals (+7.4%) and e-Finance (+7.3%).

In the red: CIB (-3.9%), Palm Hills Development (-3.5%) and Alexandria Containers and Cargo Handling (-2.6%).

Asian markets are almost all up in early trading this morning as traders wager on softer inflation data coming out of the US later on today. Futures suggest European indices will follow with a wall of green, though Wall Street futures are in the red as of this morning.