A simple 25/25/25/25 allocation across stocks, bonds, commodities, and cash is currently up about 26% year-to-date, delivering its strongest calendar-year performance since the early 1930s and one of its largest relative gains versus a traditional 60/40 stocks/bonds mix.
This pattern aligns with earlier regimes such as the 1933 recovery, the 1970s stagflation period, and the early 2000s commodity and emerging-market cycle, when portfolios with a meaningful commodity sleeve and a cash buffer significantly outperformed standard 60/40 allocations as equities stumbled or traded sideways and bond real returns eroded.
In the current environment, the outperformance of this equally weighted four-asset portfolio highlights how adding commodities and maintaining a dedicated cash slice can materially change near-term return profiles relative to equity-bond-only constructions, especially when commodity markets are in a strong bull phase and the traditional stock-bond diversification engine is less reliable.
Asset managers with established multi-asset and commodity ETF platforms, including BlackRock (BLK), State Street (STT), Invesco (IVZ), and WisdomTree (WT), are positioned to benefit from a shift toward more diversified, commodity-inclusive portfolios if the present regime of strong relative performance for these structures persists.
References
- https://canadiancouchpotato.com/2011/08/30/peering-into-the-permanent-portfolio/
- https://rpc.cfainstitute.org/sites/default/files/docs/research-reports/monash-report-1_performance-of-the-6040_online.pdf
- https://www.financial-planning.com/news/which-asset-allocation-mix-outperforms
- https://www.marketvector.com/insights/mvis-insights/the-6040-portfolio-is-dead-long-live-the-6040