A diversified 11-asset portfolio outperformed both US stocks, the classic 60/40 mix in 2025. Is it time to diversify?

For astir of the past 15 years, the elemental portfolio looked similar a genius plan. Just enactment 60% successful U.S. stocks, 40% successful bonds and rebalance erstwhile a year.

Then 2025 happened — and a much diversified premix bushed the elemental portfolio by 5%, the biggest borderline since 2009, with assets astir status accounts don’t person capable of (1).

This is 1 of the cardinal findings of Morningstar's 2026 Diversification Landscape report.

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Portfolio strategist Amy Arnott (2) tested an 11-asset portfolio against the classical 60/40 premix and discovered that the diversified portfolio not lone bushed the old‑school premix by 5% past year, but continues to outperform successful 2026, up of the elemental portfolio by 3% arsenic of April 14. (3)

Still, arsenic Morningstar reveals, implicit the past 20 years, the plain‑vanilla 60/40 inactive wins connected risk‑adjusted returns.

In different words, diversification isn't ever better. Here's wherefore 2025 was different, and what that means for however you physique your portfolio close now.

What was really successful the winning portfolio

Morningstar tested a diversified portfolio dispersed crossed 11 plus classes successful circumstantial proportions:

• 20% successful large-cap U.S. stocks.

• 10% each successful developed planetary stocks; emerging marketplace stocks; U.S. Treasuries; U.S. halfway bonds; planetary bonds; high-yield bonds.

• 5% each successful U.S. small-cap stocks; commodities; gold; existent property concern trusts (REITS)

The diversified portfolio returned 18.3% successful 2025, compared to 13.3% for a basal 60/40 premix of U.S. stocks and investment-grade bonds (1).

According to Morningstar, 3 things drove 2025's result: a weakening dollar, much charismatic planetary valuations and gold's surge. All 3 are connected to rising geopolitical uncertainty and planetary investors diversifying distant from the U.S.-centric assets.

First, planetary stocks — the ones the classical 60/40 portfolio usually ignores — had a breakout year. As tracked by Morningstar Developed Markets ex‑U.S. Index, developed markets extracurricular the U.S. jumped 32% (4), portion U.S. stocks lone gained astir 18%.

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A large portion of that was that the U.S. dollar weakened 8% against different large currencies (5). For U.S. investors, if your overseas stocks emergence successful local‑currency terms, the falling dollar gives you an other boost erstwhile you person those overseas banal gains backmost into U.S. dollars.