258: Portfolio Construction for a Changing World: Adapting to A Market Regime Shift

Portfolio construction is being redefined as investors face a fundamentally different market regime. Higher inflation, shifting interest rate dynamics, and accelerating megaforces like AI and geopolitics are challenging long-held assumptions about diversification and asset allocation across capital markets.

In this episode of The Bid, host Oscar Pulido sits down with Vivek Paul, Head of Portfolio Research and UK Chief Investment Strategist at the BlackRock Investment Institute. Together, they explore why traditional portfolio construction frameworks may no longer be sufficient and how investors are adapting to a world of greater uncertainty, dispersion, and structural change. Vivek explains how megaforces such as AI investing and geopolitical fragmentation are creating unprecedented outcomes across markets, making static asset allocation less effective. He outlines why portfolio construction must become more dynamic and granular, with a deeper focus on underlying risk exposures rather than broad asset class buckets. The conversation also examines the growing importance of private markets, active strategies, and scenario analysis in navigating today’s environment.

Timestamps

00:00 Introduction

01:56 What’s driving the shift in portfolio construction

03:24 Megaforces: AI and geopolitics

06:15 Rethinking traditional asset allocation

09:27 Diversification in a new regime

12:10 Total Portfolio Approach: Private markets and active strategies

14:28 Scenario analysis and future outcomes

17:48 Risks and maintaining structure

19:00 Key takeaways

Sources: Rethinking portfolio construction during transformation, BII February 2026

portfolio construction, capital markets, AI investing, megaforces, asset allocation, private markets, stock market trends, investing strategy, diversification

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