As we close out 2025 and look toward 2026, it’s worth taking a step back to think about how we build portfolios.

The traditional 60/40 stock-bond allocation has been the go-to for decades. It’s been taught in business schools, recommended by advisors, and quietly implemented in retirement accounts everywhere. But some of the world’s largest institutional investors have been evolving their thinking. The Total Portfolio Approach, championed by pension giants like CalPERS and CalSTRS, offers a different way to think about risk and return, creating compelling opportunities for diversifying strategies like managed futures.

But here’s the thing: for this approach to actually work, each portfolio element needs to do its job. And we need to stop judging them all by the same yardstick.

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