Sizing bitcoin in portfolios

We have updated our analysis to include the Covid-19 period - a natural experiment to see what happened to manager returns through a risk selloff and rebound of unprecedented speed and size. The results reinforce our framework.

We lay out how our strategic asset views are positioned for a new regime of greater macroeconomic and market volatility.

We see our themes persisting yet feel it is prudent to stress test our views to gauge just how different the outlook needs to be from our base case to shift our asset preferences.

In this inaugural joint paper with GIC, we look into two approaches to incorporate uncertainty in portfolio construction to overcome the shortcomings of traditional portfolio methods.

We take a look at the strategic implications of our yield curve and sectoral views

We believe climate risk is investment risk. That is why we are incorporating it into our portfolio design, an integral part of a series of actions BlackRock is taking to prepare for a net-zero world.

One important consequence of the joint monetary and fiscal policy revolution for strategic investment decisions is the potential for a more muted response of nominal yields to higher inflation – a break from the past patterns.

We launch four, investor-specific strategic asset allocations that take into account our lower expected returns across asset classes, and each investor type’s typical objectives.

Our CMAs give a view of returns over an entire horizon - a term structure. Our use of uncertainty creates a range of potential return pathways.

Building resilient, investor-specific portfolios requires a shift away from point estimates for returns. That is why we explicitly include uncertainty into our return projections.

Blending alpha-seeking and index products has become more challenging as the number of indices has increased and factor strategies have emerged.

Private markets play a core role in modern portfolios. We show how many institutional investors have room for relatively large allocations to private markets.

Worries that interest rates in regions such as the euro area and Japan are hovering around what we perceive as their prevailing lower bound force a rethink of the starting point for government bond allocations.

The Covid-19 shock turned on its head the economic trajectory that markets had priced in before the pandemic, precipitating an urgent need to revisit strategic asset allocation.