Portfolio construction

Top asset allocation trends in advisor portfolios

August 20, 2025 - 5 min

Amid tariff turbulence in the first half of 2025, advisors’ average moderate model portfolios stood resilient and posted benchmark-beating returns of 6.81%, according to Natixis’ Latin American & US Offshore Portfolio Barometer.1  One of the biggest portfolio trends witnessed in 1H 2025 was a greater flow of assets into alternatives, equities, and real assets – at the expense of fixed income and allocation funds.

Top observations from the Barometer’s in-depth portfolio analysis, performed by Natixis Invesment Managers Solutions' consulting team, include the following:

  • Outperformance driven by less exposure to US: Greater allocations to Europe, Japan, and Asia balanced with less exposure to North American and global equities achieved the best risk-adjusted returns in 1H.  
  • Underweight Magnificent 7: Exposure to the Mag 7 accounted for just under 13% of the equity allocation in the average moderate portfolio, in contrast to 20% of the MSCI ACWI.
  • Flexible, active fixed income favored: With an eye on interest rate and credit risks in the current macro environment, advisors leaned into diversified and flexible fixed income strategies.   
  • Alternative routes taken to diversify: The better-diversified portfolios incorporated 10% in alternative strategies on average, a significant overweight compared to the average moderate portfolio’s 4.3%, according to Barometer analysis.
  • Correlation, not more strategies, matters: Analysis shows that a larger number of managers in a portfolio does not inherently lead to better diversification. It’s the correlation between assets that matters most. 

Portfolio Barometer: 1H 2025

Gain insight into financial advisors’ model portfolios and the allocation decisions they are making in 2025.

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1 Portfolio Barometer methodology: All figures, unless otherwise stated, are derived from detailed analysis conducted by the portfolio consultants at Natixis Investment Managers.

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Past performance is no guarantee of future results. All investing involves risk, including the risk of loss. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments. Investment risk exists with equity, fixed income, and alternative investments. There is no assurance that any investment will meet its performance objectives or that losses will be avoided.

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