Average returns for funds with an equal mix of stock and bond allocations have historically been “statistically equivalent” during recessions and expansions, according to a Vanguard report released in early October that focused on balanced funds’ historical performance from 1926 through June 2009. The reason for this performance record, Vanguard says, is that during a recession, bonds typically outperform stocks as investors search for safety, while stock prices tend to fall in the period before a recession is declared and rise again as the economy begins to recover.

Consequently, the average returns for balanced funds between 1926 and 2009 have been “similar regardless of whether the U.S. economy was in or out of recession,” the fund giant explains. This is particularly true of inflation-adjusted or real returns, the paper notes, because inflation tends to be higher during expansions.

The research found that balanced funds rose an average of roughly 7.8 percent in recessions and 9.9 percent in expansions. After adjusting for inflation, the results were about 5.3 percent and 5.6 percent, respectively.

Vanguard acknowledges that while the average balanced-portfolio returns adjusted for inflation have been similar, specific recessions have resulted in a wide variance between returns for stocks and bonds. “Balanced portfolios have provided positive returns in a surprising number of recessionary periods, in part because equities often have done better during recessions than conventional wisdom would suggest,” according to fund group.

Despite these findings, Vanguard warns eager investors to remember that past performance is no guarantee of future results. “That a balanced 50 percent [stocks]/50 percent [bonds] portfolio has produced an average historical real return of approximately 5 percent during past recessions does not imply that a 5 percent real return is assured or even reasonable to expect should a recession occur in the near future,” according to the paper. Deep, long-lasting recessions preceded by a run-up in asset prices and leverage have been associated with lower balanced fund returns.

The level of stock valuations and interest rates going into a recession will also affect a balanced fund’s performance.