Over the weekend, Astoria released a report highlighting the performance of various asset allocation strategies during prior epidemics. We believe the most important statistics from our report are as follows:
Since 1981, there have been 11 major epidemics for which we have a 3-year track record of measuring how a 60/40 portfolio would have done over the subsequent 3-year period when the epidemic struck.
In only 1 instance, did a 60/40 portfolio produce a subsequent negative 3-year total return (-142bps for the Bird Flu virus in 2006).
Of the 11 epidemics, there has been only 2 instances where the subsequent 1-year return was negative for a 60/40 portfolio (-458bps for HIV in 1981 and -112bps for Measles in 2014).