It’s about time

Total portfolio thinking and practice

Strategic Asset Allocation (SAA) is the most common approach to asset allocation, but it has drawbacks. Firstly, looser connections between the resulting portfolio and fund goals; secondly, a slower, more constrained decision-making process. 

Our research paper argues for a switch in thinking: one that better connects the total portfolio with fund goals as they change over time. We assert that a Total Portfolio Approach (TPA) is more efficient at delivering risk-adjusted returns and long-term outcomes. TPA allows the Executive to make better use of time and be nimbler over time, hence the title. But it’s also about time that TPA becomes more widely adopted in the investment industry. 

TPA is a one-step integrated approach: The Executive (supported by the board) works on one shared objective. SAA is a two-step separated approach: The Board decide the top-down SAA and the Executives works on their respective portfolio mandates.

Strategic asset allocation vs TPA

Between SAA and TPA there is a spectrum of portfolio construction approaches. TPA allows the executive to make better use of time and be nimbler over time.

The spectrum of portfolio approaches

This switch from SAA to TPA could take several forms. Some asset owners could switch by undertaking transformational change via a roadmap; others could make smaller changes to their SAA arrangements by applying total portfolio thinking. For asset managers, this could take the form of contributing significant thinking to the advancement of TPA and its take-up by asset owners. 

If you’re looking to implement TPA in your organisation, you may find out TPA best practice checklist helpful. You can also reach out to us any time at and we’ll be happy to answer your questions about the paper and its applications. 

Visit the Total portfolio approach hub for related research from the Thinking Ahead Institute.

TPA best practice – When considering how a TPA could fit with their investment arrangements, asset owners should consider these four building blocks: 

Total portfolio approach best practice building blocks