Global Tactical Asset Allocation - Institutional

MULTI-ASSET STRATEGIES

Capital at risk. All financial investments involve an element of risk. Therefore, the value of the investment and the income from it will vary and the initial investment amount cannot be guaranteed.

What is Tactical Asset Allocation?

Tactical asset allocation (TAA) is a multi-asset investment approach that encompasses a range of top-down macro investment strategies. The primary objective of tactical asset allocation is to deliver excess returns to a portfolio via asset allocation (at the asset class, country, and/or sector level) rather than through individual security selection. The investment horizon for a TAA manager typically ranges from 3 months to 1 year.

A TAA portfolio manager actively allocates across assets according to their assessment of opportunities and risks in the prevailing market environment. TAA mandates have flexibility on multiple dimensions, enabling managers to continuously and dynamically shift positions across various asset classes and instruments. TAA seeks to deliver attractive risk-adjusted returns while managing risk and potentially controlling drawdowns.

Macro news is everywhere – economy, finance & politics. We all spend a lot of time staying on top of it. We know that it impacts financial markets, but how can you determine the signal from the noise?

Markets are smart but they’re not always efficient at incorporating information into asset prices. Our team has developed a process to identify macro drivers influencing economies, combining this with a deep understanding of market pricing to capitalize on dislocations.

We have created tools to uncover true trends in growth, inflation, and policy both globally and across regions, countries, and sectors - developing a nuanced and profound understanding beyond headline numbers.

Using sophisticated techniques, we merge human insight with rigorous data science, leveraging both structured and unstructured data sources.

Understanding market pricing is crucial. We use a diverse mosaic of data and tools to identify dislocations, because trading on even the most accurate forecasts won't generate performance if markets have already priced them in.

Tactical asset allocation (TAA) tends to be an underutilized alpha strategy in portfolios.

TAA is a top-down process that adjusts broad portfolio positions in stocks, bonds, cash, and more granular exposures across regions, countries, sectors, and currencies.

Investors can use TAA to diversify across time horizons. Our 3-12 month insights complement returns from long-term strategic asset allocations.

TAA alpha is also typically lowly correlated with returns from individual stock and bond selection strategies, making it a valuable source for generating consistent active return streams in a portfolio.

Important Notes

Past performance is not a guarantee of future results. Neither asset allocation nor diversification can guarantee profit or prevent loss.

Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.

The information contained in this communication is derived from internal and/or third-party data considered by BlackRock to be reliable, but it is not necessarily all inclusive, its accuracy and completeness is not guaranteed and it may be subject to change. This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offeror solicitation to buy or sell any securities or to adopt any investment strategy. The information and opinions contained in this material are derived from proprietary and nonproprietary sources deemed by BlackRock to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. There is no guarantee that any of these views will come to pass. BlackRock does not guarantee the suitability or potential value of any particular investment. Reliance upon information in this material is at the sole discretion of the reader.

The opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, accounting, legal or tax advice. You should consult your tax or legal advisor regarding such matters.

This material may contain “forward-looking” information that is not purely historical in nature. Such information may include, among other things, projections, forecasts, estimates of yields or returns, and proposed or expected portfolio composition. No representation is made that the performance presented will be achieved by any asset allocation or investment, or that every assumption made in achieving, calculating or presenting either the forward-looking information or the historical performance information herein has been considered or stated in preparing this material. Any changes to assumptions that may have been made in preparing this material could have a material impact on the investment returns that are presented herein by way of example.

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