These are trying times for the old 60/40 portfolio. The Wall Street Journal this week highlighted a pivot among PE firms to court retail investors after firms have successfully convinced pension and sovereign wealth funds to up private market allocations. Rather than an across-the-board increase in high-net-worth investors, a greater retail presence may show up mostly in permanent capital vehicles, such as evergreen funds or BDCs, engineered specifically with individual investors in mind.
U.S. households held $50.0 trillion in equities at the end of 2021, an all-time high. The share of household investments allocated to equities also reached a record high. The data suggests that greater investment diversification into alternatives may be appropriate. (As a side note, household equity allocation has a good track record as a negative predictor of stock market performance.) The Wall Street Journal report is available here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
