Academic research generally favours risk parity over 60/40, but investors have been slower to embrace it. Historical analysis also shows that risk parity has been the better option. Anomalies are few but notable: risk parity has experienced seven periods of sustained risk-adjusted underperformance versus 60/40 over the past 220 years, and we are currently in the eighth such period. Investors outside the top-performing US market would have seen different results, but global risk parity portfolios have historically performed better than one might expect
