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By Opalesque: How might commodities and CTA be used within a Total Portfolio Management (TPM) framework? Auspice, a Canadian quantitative fund manager, explores this option in their latest blog after observing that more investors, especially the institutional kind, think in terms of total fund objectives rather than within asset class silos.
TPM
Total Portfolio Management represents a departure from conventional asset allocation frameworks. Rather than categorizing investments by traditional labels like "equities" or "real estate," TPM focuses on the underlying risk and return drivers that transcend asset classes. This approach places all investment opportunities - whether public or private, traditional or alternative - into a unified decision-making framework where capital allocation is determined by fundamental risk-return characteristics.
The world's most sophisticated institutional investors have embraced this philosophy. Canada's "Maple 8" pension funds pioneered the approach, joined by global peers including New Zealand Super, Australia's Future Fund, and Singapore's GIC. These institutions show that TPM can add value by improving decision-making, reducing governance inefficiencies, and achieving more balanced risk exposures compared to traditional strategic asset allocation.
The commodities case
Within a TPM framework, every investment must justify its inclusion by demonstrating clear contributions to returns, risk ba...................... To view our full article Click here
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