BlackRock argues mega forces like AI and geopolitical fragmentation require a total portfolio approach rather than traditional asset class-based allocation.

BlackRock Investment Institute Portfolio Strategist Devan Nathwani presents a framework called Total Portfolio Approach (TPA) that allocates capital and risk across the whole portfolio to meet client-specific objectives by defining exposures through underlying economic and factor drivers across public and private markets.

TPA treats asset class labels as implementation tools rather than the organizing framework, because markets are increasingly driven by mega forces (like AI and geopolitical fragmentation) that cut across traditional asset class boundaries, making asset allocation decisions function as active calls.

The approach requires internally consistent risk and return assumptions across public and private assets, a plan for blending alpha, factor and index returns, and systematic ways to deal with economic uncertainty.