Morgan Stanley’s 60/20/20 Portfolio Shift Signals Gold’s Resurgence

Morgan Stanley’s Chief Investment Officer Mike Wilson has overhauled the traditional 60/40 portfolio model, proposing a 60/20/20 allocation that explicitly includes gold. The MOVE reflects growing institutional skepticism about bonds’ ability to hedge against inflation and market volatility.

Gold now commands a dedicated 20% allocation, positioned as a superior inflation hedge to Treasuries. "Gold demonstrates resilience that surpasses Treasuries," Wilson stated, noting its outperformance as an equity diversifier over the past two decades. The remaining 20% shifts to shorter-duration bonds for optimized rolling returns.

Global Gold demand validates the strategy. Central banks from El Salvador to BRICS nations and Poland are accumulating bullion at historic rates, with further purchases anticipated. This institutional momentum reinforces gold’s dual role as both safe-haven asset and real-rate-independent store of value.

The revision underscores deeper market shifts. With U.S. equities offering "historically low upside" relative to Treasuries, the framework acknowledges the limitations of conventional risk models in today’s macroeconomic environment.