The most successful macro investors don’t rely on predictions, they rely on true diversification. Rather than attempting to forecast markets, they construct portfolios of uncorrelated or negatively correlated assets that improve returns without adding risk. 

When multiple asset classes move independently, investors can use modest leverage to amplify gains while maintaining controlled volatility. This approach allows a portfolio with the same 5% volatility to generate higher expected returns simply by expanding exposure across uncorrelated assets. 

However, the strategy requires vigilance, as correlations can shift suddenly, undermining diversification’s benefits. 

Finsum: The foundation of long-term macro success lies in true diversification, careful leverage, and disciplined risk management.

Global investors are increasingly reallocating away from U.S. equities, even as Wall Street continues to notch record highs. Fund-flow data from Société Générale and EPFR show record inflows into global equity funds that exclude U.S. stocks, signaling a push for broader diversification. 

Europe and emerging markets have benefited most from this trend, with European equity products seeing record inflows this year. Currency effects and heightened U.S. policy risks under the Trump administration have also encouraged investors to look abroad. 

While many acknowledge the U.S. remains the world’s deepest and most dynamic market, its high valuations and narrow leadership have amplified concentration risks. 

Finsum: Portfolio managers showed a more globally balanced approach, blending exposure to the U.S. with selectively priced opportunities overseas.

The Pulse survey shows that advisors are shifting toward more flexible mandates, reducing allocations to core fixed income while increasing exposure to multisector fixed income and alternatives.  U.S. large-cap stocks—especially growth and blend styles—continued to dominate allocations, fueled in part by AI tailwinds and earnings strength. 

Active strategies also gained share, including active ETFs, which surged in usage over the past year. On the fixed-income side, core bond exposure was trimmed as advisors looked to diversify diversifiers like high yield, multi-sector, and credit-sensitive sectors. 

The average model portfolio holds around 16 distinct positions, and allocations to alternative strategies increased, with defined-outcome and multi-strategy mandates among the fastest-growing categories. 

Finsum: Advisors should look to factor portfolio tools to leverage in construction to better serve their clients’ needs.