BlackRock featuring Tushar Yadava, Director, Strategist in Multi-Asset Strategies & Solutions at BlackRock
Link to this WEBINAR
In the ninth episode of the SMArtX 2021 Virtual Awards Webinar Series, SMArtX CEO Evan Rapoport sat down with Tushar Yadava, Director, Strategist in Multi-Asset Strategies & Solutions at BlackRock, to discuss BlackRock’s Target Allocation model portfolios.
Evan and Tushar discuss how BlackRock’s Target Allocation models work, how BlackRock was able to find success in 2020, how they’re preparing for the future, and what this means to advisors.
About the Firm
BlackRock’s Target Allocation model portfolios seek to deliver competitive performance through actively managing portfolios and mitigating risk. These models aim to provide a simpler way to build diversified portfolios and develop scalable investment strategies for clients:
- Invests in global stocks and bonds and sticks close to the benchmark with less risk
- Seeks to deliver competitive performance through actively managing portfolios and mitigating risk.
- Aims to provide a simpler way to build diversified portfolios and develop scalable investment strategies.
- Uses ETF tax-efficient structures designed to deliver cost-effective portfolios
BlackRock’s Target Allocation model portfolios are available across a spectrum of portfolio styles to best align with client’s investment goals and objectives.
What Sets Them Apart
How was BlackRock able to outperform their 60-40 benchmark even through the beginning of the pandemic in 2020? It’s simple: The selection they had in their portfolio.
The strategy behind BlackRock’s Target Allocation model is to take a very simple benchmark and beat it by taking less risk overall. The only way you can beat a benchmark is by being active and making active decisions, and that’s just what BlackRock does. They look to limit turnover as much as they can while still taking active bets.
“Our portfolios are positioned for optimism…positioned for a rebounding and growing economy,” Tushar Yadava, Director, Strategist in Multi-Asset Strategies & Solutions at BlackRock.
BlackRock uses quantitative research to come to conclusions that help guide them through turbulent moments like March of 2020. When trying to navigate the choppy waters at the beginning of the pandemic, BlackRock looked at moments in the past where there was a massive drift in a portfolio to find when it was the most advantageous to rebalance during these moments of drift.
Through 30 years’ worth of research, BlackRock discovered that when you get to the 95th percentile of drift, that’s when you dive back in. To quote Director & Strategist in Multi-Asset Strategies & Solutions at BlackRock, Tushar Yadava, “When the market is in its most extreme pain, it’s actually advantageous to move back into the market” to buy equity and rebalance to get back to your target — or even slightly above.
How is This Applicable to Advisors?
BlackRock has found ways to thrive during an unprecedented year, but they aren’t looking to be one-hit wonders; they want to make sure they’re prepared for where the market and economy are going in a post-COVID world.
They operate under the mindset that there’s a COVID-specific playbook that’s different from a strategy you would follow coming out of a traditional recession. “Value” isn’t the same thing as “COVID value,” and there’s opportunity to harvest both in a portfolio.
“COVID value” looks at areas that have been put off during the pandemic but have a high likelihood of coming back and doing so in a really strong way. BlackRock will look to capitalize on this new type of value while also keeping an eye on the future and looking at how the new presidential administration will affect the market and economy with new tax plans, stimulus packages, and other policies.
BlackRock’s purpose is to help more people experience financial well-being. Together with their clients, BlackRock is contributing to a more equitable and resilient world – today and for generations to come.
They rely on their principles to guide how they interact with each other, their clients, the communities in which they operate, and all of their other stakeholders.
These principles represent BlackRock’s core values, their aspirations, and their cultural language – lived and embraced by every employee at their firm.