The key differences between our General Investing portfolios

"So which General Investing portfolio should I choose – StashAway or BlackRock?"

This question comes up more often than not in my conversations, especially now with the market swings we've experienced. With all the talk of tariffs, some investors are reassessing how their core portfolios should be positioned for the long term.

Both portfolios are designed to be resilient through market cycles, but they approach this goal in different ways. I'll break down the key differences between them to help you determine which approach better aligns with your investment philosophy, and whether it might make sense to invest in both.

The cornerstone of long-term wealth

Both General Investing powered by StashAway (GISA) and General Investing powered by BlackRock (GIBR) are designed to be the foundation of your wealth-building strategy – core portfolios. A core portfolio reflects your overall investment philosophy and risk tolerance and it’s where you build your long-term wealth steadily and systematically with a diversified mix of global investments.

Typically, your core portfolio represents about 70-80% of your investable assets – though this balance depends largely on your personal financial goals, time horizon, liquidity needs, and risk appetite. The remainder might go towards more specialised strategies in your satellite portfolio(s) – whether that's thematic investments, tactical positions, or alternative assets like private equity and venture capital.

Two frameworks, one goal

Both General Investing portfolios share the same fundamental objective: to deliver long-term returns by investing in a globally diversified mix of asset classes. Where they differ is in their execution.

General Investing powered by StashAway uses our ERAA® investment framework, which adapts to macroeconomic regimes like inflationary growth or stagflation. This framework monitors data like inflation and growth to identify where we are in the economic cycle, then adjusts asset allocations accordingly to better position for the new environment – all while keeping risk levels constant. Such a reoptimisation typically happens every 1-2 years.

For example, when ERAA® identified a shift to inflationary growth in April 2024, we adjusted our portfolios to increase exposure to assets that benefit from an environment of accelerating growth. This meant a greater emphasis on equities, and increased allocations to higher-yielding bonds.

General Investing powered by BlackRock® portfolios rely on BlackRock’s extensive global insights to leverage market trends and provide comprehensive exposure. Their methodology involves more frequent, incremental portfolio adjustments – approximately 4-6 times per year – based on their outlook.

For instance, following President Trump's inauguration, BlackRock reoptimised their portfolios in February. Meanwhile, ERAA® has not detected a fundamental shift that would warrant a full reoptimisation.

How each portfolio looks at risk

GISA portfolios use what we call the StashAway Risk Index (SRI) as their North Star – an application of the Value-at-Risk (VaR) metric. Simply put, your SRI represents the maximum percentage your portfolio could potentially lose in a year, with 99% confidence. For example, if you select an SRI of 20%, there's a 99% probability your portfolio won't lose more than 20% in any given year.

To maintain this consistent risk level, our portfolios set target allocations and rebalance in the background. When allocations drift due to market movements, overweight assets are sold and underweight ones are bought to bring the portfolio back to predetermined levels. Because of this, these portfolios can, at times, deviate from market performance to keep your risk level constant. In practice, this means more moderate upswings, and more downside protection.

There are 12 different SRI levels, ranging from 6.5% (most conservative) to 36% (most aggressive), letting you select a risk level that matches your comfort zone.

On the other hand, GIBR portfolios prioritise maintaining consistent asset allocations within ranges, rather than a specific risk threshold. These four risk profiles, akin to traditional asset mixes, are: Conservative (20% stocks/80% bonds), Balanced (60% stocks/40% bonds), Aggressive (80% stocks/20% bonds), and Very Aggressive (100% stocks/0% bonds).

This closer tracking of market behaviour means risk can fluctuate somewhat, even as the top-down asset allocation strategy remains relatively stable. In practice, your portfolio will generally move more in tandem with broader trends – riding the upswings but also feeling the downswings.

Taking a look inside each portfolio

Different methodologies translate into distinct portfolio compositions – which also mean a difference in performance across various environments. Let's take a look at some actual allocation differences:

Gold allocations: GISA portfolios have a significantly higher weightage to gold across all risk levels – from 3.1% in the most conservative portfolio to as high as 9.9% in our mid-risk portfolios. Gold's role as a protective asset was evident over the last quarter, when it rallied 18.2% amid market volatility, and served as a key driver of portfolio performance.

By comparison, GIBR portfolios have a 1.49% allocation to physical gold at the Conservative, Balanced, and Aggressive levels, and none at the 100%-equity Very Aggressive level.

Sector allocations: GISA includes specific allocations to industrial, consumer staples, healthcare, and technology sectors through targeted ETFs. This allows for adjustments based on how different sectors typically perform in various economic regimes.

GIBR also includes sector ETFs, but additionally uses "style" exposures with specialised ETFs that focus on specific characteristics, like lower volatility or positive momentum. This allows for fine-tuning exposure based on which factors BlackRock believes will perform best in current market conditions.

So which General Investing portfolio should I choose?

The right choice depends on your personal investment strategy, risk preferences, and financial goals. Here's a straightforward guide:

Consider General Investing powered by StashAway if:

• You want a portfolio that maintains a precise risk level
• You prefer more precise risk targeting with 12 available risk levels

Consider General Investing powered by BlackRock® if:

• You're comfortable with some fluctuation in risk level
• You prefer simpler risk selection with four distinct profiles

Consider investing in both if:

• You want to diversify your "manager risk" – the odds that any single approach might underperform
• You have a large core portfolio and want added exposure to complementary methodologies

The takeaway here is that neither approach is inherently "better". One adapts to economic regimes while maintaining consistent risk, the other maintains consistent allocations while leveraging market trends. Both are globally diversified strategies designed for long-term wealth building.

Whichever portfolio you choose – or if you decide to invest in both – the most important factor for long-term success is consistency. Ultimately, regular contributions and patience through market cycles will likely have the greatest impact on the end result.

Disclaimer

For StashAway General Investing portfolios that are powered by BlackRock, BlackRock provides StashAway with non-binding asset allocation guidance. StashAway manages and provides these portfolios to you, meaning BlackRock does not provide any service or product to you, nor has BlackRock considered the suitability of its asset allocations against your individual needs, objectives, and risk tolerance. As such, the asset allocations that BlackRock provides do not constitute investment advice, or an offer to sell or buy any securities.

BlackRock® is a registered trademark of BlackRock, Inc. and its affiliates (“BlackRock”) and is used under license. BlackRock is not affiliated with StashAway and therefore makes no representations or warranties regarding the advisability of investing in any product or service offered by StashAway. BlackRock has no obligation or liability in connection with the operation, marketing, trading or sale of such product or service nor does BlackRock have any obligation or liability to any client or customer of StashAway.