Blackrock CEO Questions Viability of 60/40 Portfolio, Proposes Shift Toward Private Assets

The traditional 60/40 investment portfolio — long considered the standard for balanced asset allocation — may no longer provide adequate diversification, according to BlackRock CEO Larry Fink.

In a letter to investors, Fink suggests a future “standard portfolio” may shift to a 50/30/20 model, with allocations to stocks, bonds, and private assets such as real estate, infrastructure, and private credit.

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“The future standard portfolio may look more like 50/30/20,” Fink wrote, arguing that private assets will play an increasingly vital role in diversifying portfolios amid changing market dynamics. The comments align with BlackRock’s strategic acquisitions of firms like Global Infrastructure Partners and HPS Investment Partners aimed at expanding access to private markets.

Despite recent doubts about the 60/40 model—particularly after both stocks and bonds fell in 2022—the portfolio rebounded with a 14% return in 2024. Amy Arnott, a portfolio strategist at Morningstar, called the 60/40 mix “a great starting point” for investors, but said those seeking more diversification could consider small allocations to other assets, including private equity.

Arnott cautioned, however, that a 20% private asset allocation may be aggressive. “If you want to mirror market values, a 6% allocation might be more appropriate,” she said, noting the $14.3 trillion private market is a fraction of the $247 trillion public market.

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Michael Rosen, chief investment officer at Angeles Investments, noted that institutional investors have already moved beyond the 60/40 model. But he warned that private investments come with significant drawbacks, including illiquidity, limited transparency, and higher fees.