The principle behind a traditional 60/40 investment portfolio is balancing two asset classes - large-cap U.S. stocks and U.S. bonds. The rationale is that U.S. stocks and bonds have low performance correlation - historically, bond funds seldom have had negative annual returns, while stock funds lost money in a calendar year nearly 30% of the time.
All bond funds, of course, are not created equal in terms of their raw performance or correlation to the stock fund with which they're teamed up in a 60/40 portfolio. Investors understandably may seek a bond fund with the best performance. But if the performance of the "best" bond fund is highly correlated with the performance of the stock fund it's paired with, the logic of a 60/40 portfolio is thrown out of whack. The goal is to add an asset class that behaves differently than stocks to provide a counter-balance when stocks tank, not to find a bond fund that produces returns that mimic a stock fund.
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