TSPKey and the 60/40 Allocation

A 60/40 allocation is comprised of 60% stocks and 40% bonds. For our TSP version, we use 20% of each fund (G, F, C, S and I). The C, S and I Funds make up the stock portion. The G and F Funds supply the bond allocation.

We consider 60/40 our most important benchmark. Why? It’s been used by institutional investors since the 1960s. Famed investment author Peter Bernstein called it the center of gravity of asset allocation for long-term investors.

60/40 is also a popular benchmark for hedge funds. In fact, hedge funds have a hard time beating it. In his book Dual Momentum Investing, Gary Antonacci showed that 60/40 outperformed the Bloomberg Hedge Funds Aggregate Index each year from 2003 to 2013. For the record, 60/40 also outperformed the index in 2014 and 2015.