Despite their benefits, diversifying alternatives are still underrepresented in advisor portfolios: only 18% of the 23,937 advisor model portfolios we’ve analyzed over the last year include an allocation to alternatives. And even those that do tend to hold relatively small positions: The average moderate portfolio has an 8% allocation to alternatives, while the Target Allocation Hybrid with Alternatives 60/40 model portfolio has an 18% allocation.4
Investment opportunities for 2026
Many of our investors are entering 2026 with a constructive equity outlook, but with a diversified approach to asset allocation.
We maintain a bias towards the big AI names, which can be accessed via the iShares A.I. Innovation and Tech Active ETF (BAI), and we also like the iShares U.S. Equity Factor Rotation Active ETF (DYNF) for a nimble approach to quick-moving markets.
While we’re encouraged to see bonds acting as ballast again, and see potential opportunities in strategies such as the iShares Systematic Bond ETF (SYSB) and iShares Flexible Income Active ETF (BINC), we also see potential benefits to incorporating diversifying alternatives such as the BlackRock Equity Market Neutral Fund (BDMIX).
Last, with cash rates projected to fall further, we anticipate many investors seeking additional income. Options-based strategies such as the iShares U.S. Large Cap Premium Income Active ETF (BALI) and iShares 20+ Year Treasury Bond BuyWrite Strategy (TLTW) may be able to provide rate pick-ups versus traditional assets, as can the custom SMA overlays offered by SpiderRock Advisors.
BlackRock is here to help. Connect with your BlackRock market team or call 877-ASK-1BLK if you have any questions on translating markets into the right portfolio implications for you.
Explore the Advisor Outlook – BlackRock’s monthly market outlook for financial advisors – for more details on our latest market and portfolio insights.
Emily Fredrix Goodman and Oliver Hering contributed to this piece.
