MyFolio strategic asset allocation update
Enhancing diversification while maintaining long-term discipline.
Duration: 2 Mins
Date: 16 Jul 2026
The latest review covers all MyFolio ranges, including Index, Enhanced ESG Index, Core and Multi-Manager.
After making no changes to the SAA last year, we have introduced a series of incremental refinements: improving consistency across the ranges, increasing exposure to a broader set of growth assets, and ensuring each portfolio remains aligned with its long-term risk profile.
The new SAA includes two main evolutions:
- A refined balance between short-duration and all-maturity fixed-income asset classes
- Increased exposure to alternative growth assets and a modest reduction in traditional equity exposure
The changes are designed to maintain the integrity of the risk-targeted framework, while giving portfolios a broader opportunity set in the current market environment.
Why are changes being made?
The review is based on Aberdeen’s latest long-term capital market assumptions, including expected returns, volatility and correlation characteristics across asset classes.
An opportunity to refine portfolio construction.
The updated assumptions show modestly improved prospects for sovereign bonds, generally lower equity return assumptions following strong market performance, and a more attractive outlook for areas such as infrastructure and global real estate investment trusts (REITs).
This has created an opportunity to refine portfolio construction. Rather than relying as heavily on traditional equities for long-term growth, the portfolios make greater use of alternative growth assets, such as infrastructure and real estate equities.
What is changing in portfolios?
Within fixed income, we have increased allocations to short-duration bonds. This reflects the desire to improve portfolio resilience and reduce sensitivity to longer-term interest-rate moves, while still maintaining appropriate defensive exposure.
Within growth assets, traditional equity exposure is being trimmed modestly across the risk profiles with equity reductions across profiles ranging from -1.0% to -2.7% depending on the risk level.
At the same time, portfolios are increasing allocations to alternative growth assets including infrastructure and global REITs. Infrastructure benefits from stronger long-term expected return expectations and REITs are looking more attractive due to improved risk-adjusted characteristics.
Why reduce equities if portfolios are long term?
Equity return assumptions have moved lower following strong market returns. At the same time, the expected return and risk-adjusted characteristics of some alternative growth assets have improved, particularly infrastructure and REITs.
This means portfolios can continue to target long-term growth, but with a more diversified toolkit. In simple terms, the changes aim to reduce reliance on traditional equities, while still maintaining growth potential through a broader mix of assets.
What about the ESG ranges?
Since the introduction of the Sustainable Disclosure Requirements (SDR) in December 2024, the fund market has continued to evolve and our investment selection universe has expanded. Newly available SDR-eligible funds allow our active ESG range to add asset classes like short-dated inflation-linked bonds, UK investment-grade credit, short-dated UK investment-grade credit, and global REITs.
In summary
The proposed changes aim to:
- maintain alignment with each portfolio’s long-term risk objective
- increase exposure to shorter-duration fixed income
- broaden the growth allocation beyond traditional equities
- keep portfolio turnover controlled
- maintain robust liquidity under both normal and stressed market conditions
More about MyFolio
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