Traditional portfolio no longer fits today’s volatile markets, says BlackRock CIO

InvestorDaily

BlackRock Australia’s chief investment officer, Michael McCorry, says navigating uncertainty requires a blend of strategic flexibility and disciplined execution, particularly in a world of rapid geopolitical and policy shifts. “There are times to be bearish. And there are a lot of geopolitical risks out there. Certainly things you need to consider in a portfolio,” McCorry said at the Australian Wealth Management Summit 2025. “I have the tremendous luxury of having an Aladdin system where I can look at tail risks, I can work with our risk people, let’s create a scenario where this and this happens. What would that look like? How would that impact this portfolio or that portfolio? That helps you think about the portfolio.”

McCorry said markets remain choppy and volatile, making the traditional 70/30 mix of equities and fixed income unlikely to deliver the returns investors once relied on. In fact, BlackRock projects annualised returns for these portfolios to fall from 9.1 per cent to 5.6 per cent over the next decade. As such, McCorry argued that investors now need a more flexible structure, with roughly 70 per cent equities, 15 per cent fixed income, and 15 per cent allocated to hedge funds to better manage downside risk.

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