For decades, the 60/40 portfolio was the financial equivalent of putting on a seatbelt. Stocks for growth, bonds for safety, and a nice diversification benefit that smoothed out the bumps. AMP, one of Australia’s largest superannuation managers overseeing roughly A$159 billion (about $114 billion) in assets, just decided that seatbelt doesn’t work anymore.
The company has removed government bonds from some of its retirement fund portfolios, replacing them with a notably old-school alternative: gold. More than 80% of AMP’s MySuper portfolios now allocate more to gold than to sovereign debt.
The 2022 wake-up call
In 2022, rising interest rates and surging inflation did something bonds weren’t supposed to do: they fell alongside stocks. The traditional negative correlation between equities and government debt, the very foundation of balanced portfolio construction, broke down in spectacular fashion. Investors holding both asset classes for diversification purposes got hit on both sides.
AMP’s response has been to treat that episode not as an anomaly but as a signal. If sovereign bonds can no longer reliably move in the opposite direction of equities during stress periods, their role as a defensive allocation becomes harder to justify.
A broader rethink of defensive assets
AMP isn’t just swapping bonds for gold. The company has also trimmed its private credit holdings from around 2.5% to roughly 2% of relevant portfolios in 2026.
AMP CEO Adam Forbes has pointed to the necessity of adapting to current economic conditions.
Australian superannuation funds operate under regulatory benchmarks that influence how they construct portfolios. When a fund of this size makes a structural change to its asset allocation, it tends to reflect deep institutional conviction rather than a flavor-of-the-month trade.
What this means for investors
AMP isn’t some contrarian hedge fund trying to generate alpha through unconventional bets. It’s a mainstream retirement savings provider making decisions on behalf of everyday workers. When that type of institution says bonds aren’t doing their job, it carries weight.
Most target-date funds, robo-advisors, and financial planning models still assume bonds provide meaningful diversification against equity drawdowns. If a $114 billion manager has concluded otherwise, perhaps individual investors should at least pressure-test that assumption in their own portfolios.