The total portfolio approach (TPA) is a total portfolio allocation strategy that moves away from focusing on individual asset classes or labels and instead considers the entire portfolio’s exposure to fundamental risk factors, such as economic growth, interest rates, or foreign currencies, regardless of the specific assets involved. TPA evaluates risk and return at the portfolio level, aiming for a unified view of how each investment contributes to the overall objectives and risk profile. This approach dismantles silos between different investment teams and encourages a collaborative, outcome-oriented mindset, where performance is measured against total portfolio goals rather than individual asset class benchmarks.
Liquidity plays a particularly important role in total portfolio approach. A given exposure may be delivered by both liquid and illiquid investments, while rebalancing and payouts require liquid investments only. Total portfolio approach brings clarity to managing liquidity using multi-period simulation.
We offer advisory in the strategic allocation space to institutional investors and family offices, delivering results based on a decade-long experience of total fund allocation and modeling across all asset classes.