At a glance
- The firm argues market-neutral strategies now provide more portfolio ballast than bonds and prefers the mix to the traditional 60/40.
- Mike Pyle, deputy head of portfolio management, told Hedgeweek in an Oct. 29 interview that the alternatives sleeve “may be private assets but also hedge funds.”
- For allocators, the 20% sleeve is a single budget line: private assets and hedge funds compete for the same dollars.
BlackRock’s second-half hedge fund outlook promotes a 50/30/20 allocation: 50% equities, 30% traditional bonds and 20% alternatives. The firm argues market-neutral strategies now provide more portfolio ballast than bonds and prefers the mix to the traditional 60/40.
Mike Pyle, deputy head of portfolio management, told Hedgeweek in an Oct. 29 interview that the alternatives sleeve “may be private assets but also hedge funds.” He wrote the outlook’s foreword and oversees $5 trillion in systematic and discretionary strategies.
For allocators, the 20% sleeve is a single budget line: private assets and hedge funds compete for the same dollars. That makes liquidity terms, fees and capacity in market-neutral and multi-strategy funds the deciding comparison rather than the macro view.
Pyle said clients continue to want hedge fund strategies that can dial out market risk, remain beta-neutral and reduce traditional sources of factor risk.
Alternatives previously reported that multistrategy headcount growth slowed to 7% while external SMA allocations reached $47 billion.
BlackRock's 50/30/20 versus the traditional 60/40
Recommended portfolio weights, % of assets
BlackRock 50/30/20
50/30/20
- Equities
- 50%
- Bonds
- 30%
- Alternatives
- 20%
Traditional 60/40
60/40
- Equities
- 60%
- Bonds
- 40%
Show as table
| BlackRock 50/30/20 | Traditional 60/40 | |
|---|---|---|
| Figure | 50/30/20 | 60/40 |
| Equities | 50% | 60% |
| Bonds | 30% | 40% |
| Alternatives | 20% |
Reported by the Hedge Funds & Liquid Alts desk from Hedgeweek and Alternatives archive. Published . Corrections