Fidelity exec’s new 60/20/20 portfolio makes room for crypto – Here’s why

Should Bitcoin [BTC] have a place in your portfolio? Some investors say it helps spread out risk. Others think it just adds more of it.

The 60/40 portfolio is now 60/20/20

The latest take on this comes from Jurrien Timmer, Global Macro Director at Fidelity.

In a post on X, he said the old 60/40 portfolio, 60% stocks and 40% bonds, has had its day. What’s replaced it is a 60/20/20 split: 60% equities, 20% bonds, and 20% alternative assets.

Timmer says this change kicked in after the pandemic, and he doesn’t see a reason to switch things up right now. The 60/40 setup has been the default for decades, so setting aside a fifth of a portfolio for alternatives is no small thing.

Eventually, Bitcoin will come up in the conversation.

Where BTC fits in this new plan

In Timmer’s updated model, 20% goes to alternative assets. That covers gold, commodities, cash, Bitcoin, REITs, and managed futures.

So why talk about BTC?

BTC’s correlation with the S&P 500 is at 30%, and it has no correlation with US Treasury bonds. Bitcoin doesn’t always move in step with stocks and bonds; exactly what you want from something meant to diversify.

That said, Timmer was clear that this isn’t an optimized portfolio. He called it a rough example of how assets could be split and said it shouldn’t be taken as investment advice.