Article Jan 12, 2026

2026 Outlook: Total Portfolio Approach – The New Normal

Share and Save
Contact Us

In today’s volatile markets, asset owners and asset managers face unprecedented complexity. For multi-asset strategies where public and private markets converge, traditional siloed approaches — independently managing equities, fixed income, and private markets — are no longer sufficient. Enter Total Portfolio View (TPV) and Total Portfolio Approach (TPA) ─ two interconnected concepts reshaping how institutions allocate capital and manage risk.

TPV and TPA are changing investment management. As more asset owners think in terms of total portfolio outcomes, rather than asset class silos, asset managers will also need to adapt.

For more information on tools that support these concepts, see Cutter’s 2025 research, Asset Allocation and Total Portfolio Solutions.

TPV and TPA

At its core, TPV refers to the ability to aggregate and assess all investment exposures — across asset classes, geographies, and strategies — into one integrated framework. This means shifting from viewing multi-asset portfolios in isolated silos (equities, fixed income, private markets, etc.) to a single cohesive view across the entire fund.

TPA takes TPV a step further by embedding it into the investment philosophy. It’s more ambitious, and at present, not for everyone. In fact, according to our Asset Allocation and Total Portfolio Solutions member survey in 2025, half of the asset owner respondents believed TPA poses too monumental a shift to implement.

Rather than allocating capital based on rigid asset class targets (as in Strategic Asset Allocation, or SAA), TPA manages the entire portfolio holistically using a common language of risk.

SAA has long formed the cornerstone of institutional investing. But TPA represents an evolution in how firms execute capital allocation decisions, with the key difference in its agility. TPA emphasizes continuous evaluation of opportunities across all asset classes, rather than sticking rigidly to preset allocation bands.

The TPA Effect: Asset Management Mandates

TPA will not only affect how asset owners allocate capital, but also how they evaluate and partner with external managers. Asset managers must adapt now.

Under TPA, asset owners think in terms of total portfolio outcomes. As a result, more asset owners will look to external managers for specialized expertise and customized solutions (e.g., custom benchmarks, overlays, hedging, bespoke factor exposures and tilts, etc.).

Asset managers, especially those with OCIO and solutions mandates, should invest in advanced portfolio analytics, scenario modeling, and reporting tools to clearly demonstrate their cross-asset expertise and contribution to the total portfolio.

TPA is shaping up as the new normal going forward, and for it to succeed firms will require greater collaboration and customization in both design and implementation.

TBC

Today, most asset owners organize themselves around the SAA model — asset class silos, with different investment teams, and many of those firms would argue that it’s too significant a shift to switch to a TPA model. While this model makes sense for a variety of reasons, it impedes any attempt to make strategic whole-of-fund decisions or fully embrace TPA.

But the real story doesn’t end there.

While many asset owners see TPA as too big a change, it’s hard to ignore TPA’s benefits. A recent WTW Thinking Ahead Institute peer group study of 26 asset owners showed that asset owners using TPA added 1.3 percent in performance above those using SAA over 10 years.

We predict that TPA principles will become more widespread, embedded into the investment process of asset owners across the globe, even if a full transition isn’t feasible right away.

But firms will only achieve success if they invest in the tools to support them and incentivize staff to focus on the total fund.

To be continued (TBC) …

You have to start somewhere. At Cutter Associates, we understand the foundational building blocks of TPA and work with other firms that are embarking on the same journey. If you are interested in this topic, or have insights to share, let’s talk. Contact us at [email protected].

Log In to save this insight and easily revisit it later

Membership is Required to Access This Insight

Full access to all insights and their associated resources is reserved for Cutter members, with partial access granted for select content.

Member Login

Log in for full access.

Forgot Password

Don’t have a login and your firm is a Cutter Research member? Create an account for full access.

Not a member firm or unsure? Contact Us about a firmwide Cutter Research membership.