Advisors are rethinking portfolio construction in 2026. In a world that feels very different from the last decade, Allison Bonds Mazza of State Street Investment Management sees a clear pattern emerging in how the most resilient firms are positioning client assets.
“We’re seeing advisors positioning portfolios for a much more uncertain world, particularly when they compare the current market environment to the previous 10 years,” she explains. “And I’m seeing that play out in three themes.” Those themes—resilience, tactical positioning, and diversification—are shaping flows across State Street’s ETF lineup and offering a roadmap for advisors navigating the next phase of the cycle.
Building resilient core portfolios
Mazza sees a renewed focus on resilient portfolios that can withstand a wider range of macro and market outcomes. Advisors are recalibrating core exposures and seeking strategies that have been tested across regimes, not just in a low-rate, growth-led decade.
A fund benefiting from this demand is the State Street Bridgewater All Weather ETF (ALLW), which packages Bridgewater’s long-standing risk parity approach into an ETF structure. “The demand we’re seeing for the State Street Bridgewater All Weather ETF is driven in part by advisors searching for solutions that can help prepare portfolios for an uncertain future,” Mazza says. “We just won three awards from ETF.com. One of those awards was Best ETF of the Year for 2025.”
For years, Bridgewater’s All Weather strategy was effectively off-limits to the typical wealth client. “With ALLW, investors and advisors are now able to access Bridgewater’s time-tested risk parity strategy that was previously only available to institutional investors and high net worth investors if they were lucky,” she notes. Bringing that expertise into a liquid, transparent ETF is enabling advisors to embed institutional-grade diversification into the core of client portfolios rather than relying solely on traditional 60/40 allocations.
The market’s response has been emphatic. ALLW reached one billion dollars in assets in less than a year, placing it in extremely select company among new launches. Only a small fraction of the more than one thousand ETFs launched last year hit that milestone before their first birthday, and many of those were backed by conversions or self-funded scale. For advisors, that kind of early adoption signals strong peer validation as well as the attractiveness of a core solution designed explicitly for resilience.
Tactical positioning through sectors
The second theme Mazza highlights is more deliberate tactical positioning, especially through sector ETFs. In an environment defined by geopolitical risk, shifting inflation expectations, and uneven growth across industries, advisors are less willing to simply accept the sector weights embedded in broad market indices.
“For the first two months of the year, there were about $29 billion in sector ETF flows,” she notes. “That’s a record start for any year, and State Street’s sector ETF suite has existed since 1998. What’s interesting is that 65% of the sector flows are going into cyclicals, like energy, industrials, and materials.” Advisors are using targeted exposures to capitalize on opportunities that market-cap-weighted indices currently underrepresent.
Energy is a vivid example. The S&P 500 today carries only a very small allocation to the sector, even as geopolitical uncertainty and higher oil prices have put energy back in the spotlight. For clients who expect or desire direct participation in that theme, many advisors are turning to sector ETFs. “If you’re just buying a broad-based index, you probably don’t have a ton of energy exposure,” Mazza explains. “So, advisors are buying an ETF like XLE to increase their energy exposure in a time like this.”
The broader takeaway: tactical sector tools are no longer just for traders. They have become essential levers for wealth managers who want to take a closer look at what they own and align portfolios with client expectations and today’s macro realities, without abandoning diversified cores.
Diversification with gold and alternatives
The third major trend is a deeper embrace of diversification, particularly through gold and alternative strategies. Gold ETFs have seen powerful, sustained interest. “Gold ETFs have brought in $10 billion in the first two months of the year,” Mazza says. “What’s interesting about this, when we chat with advisors, it’s not necessarily a short-term tactical trade. It’s more a long-term, strategic allocation.”
In an environment characterized by lower policy rates, a weaker dollar at times, geopolitical uncertainty, and renewed inflation concerns, advisors are rediscovering gold’s role as a long-term portfolio hedge rather than a fleeting trade. “Gold has always been a strategic hedge in portfolios, but in times like these, investors are reminded of its utility and the value it adds to a portfolio,” she adds. Many advisors expect that the next decade will look very different from the last, and they are positioning accordingly.
Alongside gold, liquid alternatives and multi-asset strategies are gaining traction as advisors look for exposures that “zig when other things zag.” Mazza emphasizes that this push toward alternatives is not new conceptually, but the implementation barriers have historically been high. “We’ve talked for a long time about the benefits of adding in alternatives into portfolios, but for years allocations to alts have remained low,” she says. Paperwork, lockups, and operational complexity kept many wealth clients on the sidelines.
The ETF structure is changing that. “That’s why ALLW is so interesting,” she explains. “It’s democratizing access to a strategy that, since 1996, was only available if you had many zeros in your account.” By wrapping sophisticated, institutionally proven approaches inside a low-friction ETF, State Street is making it far easier for advisors to incorporate true diversifiers into client portfolios at meaningful weights—not just nominal 3–5% slices.
Active fixed income for a new rate regime
On the fixed income side, State Street is seeing advisors lean into high quality active managers to navigate duration, credit, and the evolving rate environment. With policy rates moving lower and the yield curve still sending mixed signals, many advisors prefer to outsource the security selection and tactical rate calls to seasoned fixed income teams.
“I think advisors are looking to best-in-class active managers, and we’re seeing really strong inflows into some of our active products, like our ETFs in partnership with DoubleLine or Apollo,” Mazza says. The DoubleLine suite includes TOTL, an actively managed total return ETF run by Jeffrey Gundlach and team, as well as STOT, a shorter-duration version that has attracted particular interest among advisors who want to stay flexible while still earning income.
State Street’s partnership with Apollo produced PRIV, a core plus ETF that pushes beyond traditional public bonds. PRIV incorporates private credit as its “plus” sleeve, giving advisors access to a broader opportunity set inside a familiar wrapper. The market has taken notice of this innovation as well—PRIV won Best New Fixed Income ETF at the same ETF.com awards.
“We are seeing a growing trend of advisors allocating to actively managed fixed income ETFs,” Mazza says. “Letting an active manager pick and choose where they’re getting the plus in a core plus, or where they’re moving from a duration standpoint.” For advisors, these strategies offer a way to modernize fixed income exposure without needing to build and maintain complex bond portfolios themselves.
Balancing US and international equity exposure
While US equities still dominate most client portfolios, Mazza observes a slow but meaningful shift toward a more balanced global stance. “We’re seeing advisors take a more balanced view,” she explains. “I think most portfolios that we see today tend to be overweight US equities. But they’re starting to allocate more to international, particularly in the emerging market space.”
This rebalancing is as much about concentration risk as it is about valuations. Many portfolios have become heavily reliant on US mega-cap technology and the so‑called “Mag Seven” for returns. Advisors are increasingly uncomfortable with that level of dependence on a narrow slice of the market and are using ETFs to broaden exposures across regions, sectors, and factors.
State Street’s global equity lineup gives advisors tools to implement these shifts in a systematic, cost-effective way, enabling them to adjust regional tilts without disrupting the underlying portfolio architecture or creating unnecessary tax events.
ETFs as the advisor’s primary toolkit
Stepping back, the most striking datapoint from Mazza’s vantage point is just how central ETFs have become to the advisor toolkit. Across resilience, tactical moves, diversification, and income, advisors are consistently reaching first for ETF solutions.
“For the first two months of the year, $366 billion has gone into US-listed ETFs,” she notes. That pace puts the industry on track for yet another record year of ETF flows, following a record $1.5 trillion in 2025. The message is unmistakable: “Without a doubt, ETFs are the tools that advisors are using when they’re building portfolios—whether that’s to build in more resilience, to add in some diversification, or do some tactical positioning by adding sector exposures they may not have in their core holdings.”
For State Street, one of the pioneers of the ETF industry, this environment plays directly to the firm’s strengths. From the firm’s sector ETFs and gold strategies to innovative partnerships with Bridgewater, DoubleLine, and Apollo, State Street’s ETF platform is built to give advisors institutionally credible solutions that are easy to implement in real-world wealth practices.
What advisors should be telling clients now
Looking ahead, Mazza believes the central message advisors should reinforce with clients is straightforward: the next decade will not mirror the last one. That reality demands intentional portfolio construction rather than blind reliance on yesterday’s winners.
“Building resiliency into portfolios to prepare for what’s to come,” she says, should be the starting point. That can mean using a multi-asset, risk-parity-oriented solution like ALLW in the core, rather than assuming a traditional 60/40 mix will automatically deliver the same experience it has historically.
Second, she stresses true diversification—owning asset classes that behave differently when stress hits. Gold is a prime example, as are certain alternative strategies and sector tilts that can offset concentrated growth exposures. “Having asset classes that don’t behave the same way, adding in something like gold,” she says, gives advisors more tools to manage client emotions and outcomes through volatility.
Finally, Mazza urges advisors to be tactical and intentional about what’s actually in client portfolios. Using the energy example, she notes that standard benchmarks may not provide the exposures clients expect or need in today’s macro environment. “Making sure that you’re double clicking, knowing what you own,” and using ETFs to fill gaps or rebalance concentrations, is essential.
Taken together—resilient cores, strategic diversification, and carefully chosen tactical levers—this framework offers advisors a practical way to navigate an uncertain decade while meeting clients where they are.
If you want to explore the strategies and tools Allison Bonds Mazza discussed—from ALLW and sector SPDRs to active fixed income ETFs—visit State Street’s website to learn more about how their solutions can support your practice and your clients’ goals.