Speaking at the Australian Wealth Management Summit 2025 on Friday, McCorry said the firm relies on its Aladdin system to model scenarios and stress-test portfolios against extreme events.
“I have the tremendous luxury of having an Aladdin system where I can look at tail risks, I can work with our risk people and create [different scenarios]. What would that look like? How would that impact this portfolio or that portfolio?” he said.
Recently, BlackRock determined it can no longer rely on a single base case when long-term investment planning, citing unprecedented global changes that make long-term forecasting less certain.
The firm identified mega forces, such as AI, geopolitical fragmentation, demographic divergence, the low-carbon transition, and the reshaping of global finance, as the primary drivers of an “economic transformation with an unknown end”.
Currently, BlackRock’s 70/30 portfolio – with market neutral and multi-strategy hedge fund exposure – is slightly overweight equities, but protected against downside risk.
“We kept challenging ourselves as a team, what is going to be the trigger that could cause unraveling?
“There’s a whole bunch that we can make up. We don’t know what that is. [Leave] the first 5 per cent [as is], that’s fine, but as you go more than 5 per cent out to 15, 20 per cent we want some protection in the portfolio,” McCorry said.
Speaking on equities, McCorry explained BlackRock Investment Institute's quick shift in positioning following the announcement of US President Donald Trump’s so-called “Liberation Day” tariffs in early April this year. Namely, at the time, BlackRock moved neutral on equities before returning overweight a week later.
According to McCorry, the BlackRock Investment Institute initially expected the impact of tariffs to persist, before reassessing as policy signals changed.
“There was the flipping. It’s on, it’s off. These tariffs are on, these tariffs are off…. And so with all that chopping and changing, it’s important to look through, be stable, be diversified, and we challenged ourselves within the team not to be too bearish and where we were bearish, get some asymmetric protection,” McCorry said.
