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Total Portfolio Approach

Concept 5 of 6

One team, one portfolio

A fund culture where governance, pay and daily habits reward whatever improves the whole fund, so no team gains by guarding its own slice.

Why this matters to you

Choose your view in the header to see why this matters to you and to start at the right level.

In plain words

In many funds, each team protects its own pot of money and its own bonus. In a one-team fund, everyone works for the whole pot, so a team that hands money to a better idea elsewhere earns credit rather than a smaller bonus.

Sources: Thinking Ahead Institute 2019, p. 4; Bridgewater Daily Observations podcast 2024, Ch. 2–3

Picture it

Picture a fund run on strategic asset allocation (SAA). The board fixes a target weight for each asset class, and each class gets its own team, benchmark and bonus pool. That breeds silos: each team does what suits its own patch, even when that hurts the whole.

Under the total portfolio approach (TPA), everyone shares one scoreboard: the whole fund's result, often measured against a reference portfolio, a cheap mix the fund could hold instead. The example below shows how pay alone can decide whether someone speaks up.

Sources: CFA Institute Research & Policy Center 2026, p. 39; CFA Institute Research Foundation 2026, p. 19; Thinking Ahead Institute 2019, p. 4; CAIA Association & Thinking Ahead Institute 2025, p. 10; CFA Institute Research Foundation 2026, pp. 22–23, 35

Two ways to pay a credit team head

Illustrative numbers

The head of a fund's credit team concludes that credit is poorly rewarded and that the fund should halve its credit holdings. Whether that view ever reaches the investment committee may depend on how the head is paid.

Same person, same view, two pay schemes (illustrative)
FeaturePay scheme APay scheme B
How the bonus is setEntirely on the credit team's return against a credit index, scaled by the money the team manages50% on the whole fund's result against the reference portfolio over four years, 30% on the team's contribution, 20% on a judgement of collaboration and decision quality
What recommending a cut doesShrinks the team and the base its bonus is paid onImproves the fund's result, and the recommendation itself counts in the head's favour
Likely behaviourSilenceSpeaks up

Scheme B resembles the blend the CFA Research Foundation review describes: whole-fund results over several years, the team's contribution and a judgement of how people work. The same review warns that paying only on the whole fund invites free-riding, while paying only on the team's benchmark rebuilds the silos.

How funds do it

Culture is built from ordinary machinery: what the board approves, how bonuses are worked out and who joins which meeting. In the CFA Research Foundation review's model, the board approves a long-term, whole-fund pay philosophy and management designs the scheme.

  • Future Fund (Australia). The motto is printed on the fund's coffee cups and tied to governance and incentives. Largely on its credit team's advice, the fund kept credit holdings small for nearly ten years (as of Aug 2024 · source). A visiting manager expecting a handful at meetings found about 25 people (as of Aug 2024 · source). Its chief investment officer, Ben Samild, offers no pay formula and asks how to reward people who say "Please take money away from me".
  • GIC (Singapore). Its One GIC reform merged once-separate investment units. Staff are assessed on the total portfolio over several periods, and senior cash bonuses are deferred, subject to later results.
  • CPP Investments (Canada). For most staff the bonus weighs the Fund, the department and the individual at 30% / 30% / 40% (as of FY2026 (year to 31 Mar 2026) · source); for senior management the Fund's weight is 50% (as of FY2026 (year to 31 Mar 2026) · source). The Fund part blends multi-year return, multi-year value added and annual objectives at 40% / 40% / 20% (as of FY2026 (year to 31 Mar 2026) · source).
  • CalPERS (United States). Its board education contrasted a siloed culture under SAA with a collaborative one under TPA, and investment staff are paid on the whole portfolio, not by asset class.

Sources: CFA Institute Research Foundation 2026, Exh. 5, pp. 34–35; Bridgewater Daily Observations podcast 2024, Ch. 2–3; CAIA Association 2024, pp. 30–31; CPP Investments 2026, pp. 31–32, 81–82; CalPERS Board 2025, slide 4; CalPERS 2025, transcript p. 59

Expert view and evidence

Formally, the CFA Institute guide defines culture as the way shared values and beliefs shape how an organisation thinks and acts. CAIA, an industry association that promotes TPA, counts it among the approach's four dimensions, beside governance, a factor lens and competition for capital.

In theory, if pay tracks a team's own benchmark, guarding the silo is individually rational: a principal–agent problem in miniature. The CFA Research Foundation review therefore favours mixed pay, with whole-fund measures for senior roles, mandate measures for specialists and a judgement of collaboration. Variants include one shared office (NSW TCorp) and a central completion portfolio (CPP).

The evidence is thin. Cultural change was the most cited obstacle in a small CFA Institute survey (5 of 10 (as of late 2025 · source)1 firms), yet only 2 of 10 (as of late 2025 · source) use organisational alpha as a success measure, and no study measures culture's effect on returns. Pay is the weak spot: in a 2019 study only 6 of 18 (as of 2019 · source)2 funds rated theirs well aligned. The gravitational pull back to silos never stops, and collaboration got harder to scale as Future Fund staff grew from about 20 to 360 (as of Jun 2026 · reported · source). No controlled study shows that TPA beats a traditional SAA, and the CFA Research Foundation review (2026) finds the literature does not establish systematic outperformance. Much of this comes from bodies that promote or sell TPA services, and the Future Fund's account came on a podcast hosted by one of its managers.

Sources: CFA Institute Research & Policy Center 2026, p. 31; CAIA Association 2024, pp. 4–5; CFA Institute Research Foundation 2026, pp. 19–23; CAIA Association & Thinking Ahead Institute 2025, p. 15; CFA Institute Research & Policy Center 2026, pp. 26–27; Thinking Ahead Institute 2019, pp. 10–11; Investment Magazine 2026, P2–P5; CFA Institute Research Foundation 2026, p. 39; Thinking Ahead Institute 2025, pp. 11–12; Bridgewater Daily Observations podcast 2024, Introduction

Notes on the numbers

  1. 5 of 10, CFA Institute survey: firms naming cultural change among their biggest TPA implementation challenges, the most cited item (technology: none): A small survey of firms already engaged with TPA, which its authors say is not representative.
  2. 6 of 18, Funds in the Thinking Ahead Institute's 2019 study that rated their pay well aligned with outcomes, the weakest of the attributes rated: Self-ratings by the participating funds.

Common misunderstandings

“It's just a slogan on a coffee cup.”

In fact:

At the Future Fund the motto is tied to governance, alignment and pay. Without those, the CFA Research Foundation review warns, a fund can talk about one portfolio while its teams still keep competing scoreboards.

Sources: Bridgewater Daily Observations podcast 2024, Ch. 2–3; CFA Institute Research Foundation 2026, pp. 24–25

“One team means nobody competes any more.”

In fact:

Teams stop competing with each other, but ideas still compete for the fund's capital. The Thinking Ahead Institute's founding contrast sets competing teams under SAA against one collaborating team under TPA.

Sources: Thinking Ahead Institute 2019, p. 4

“Paying everyone on the whole fund solves it.”

In fact:

Whole-fund-only pay invites free-riding, because one person's effort barely moves the total. The CFA Research Foundation review recommends a blend of whole-fund, mandate and qualitative measures, and GIC adds deferral.

Sources: CFA Institute Research Foundation 2026, pp. 22–23; CAIA Association 2024, p. 31

“Once the culture is built, it stays built.”

In fact:

Even leading funds report a constant pull back to benchmarks and silos. It is strongest under stress, when organisations fall back on the measures they know best, such as asset-class benchmarks.

Sources: CAIA Association & Thinking Ahead Institute 2025, p. 15

Check yourself

Which pay design best supports one team, one portfolio?

Related

Sources

  1. The Total Portfolio Approach (TPA): A Practical Guide for Navigating the Transition to TPA. CFA Institute Research & Policy Center (R. Urwin & G. Hayman), 2026.
  2. Total Portfolio Approach: A Critical Literature Review. CFA Institute Research Foundation (R. Elkamhi and J.S.H. Lee), 2026.
  3. Total Portfolio Approach (TPA): A global asset owner study into current and future asset allocation practices. Thinking Ahead Institute (WTW) with NSW TCorp, 2019.
  4. From Vision to Execution: How Investors Are Operationalizing the Total Portfolio Approach. CAIA Association & Thinking Ahead Institute (A. Filbeck, J. Bok), 2025.
  5. Innovation Unleashed: The Rise of the Total Portfolio Approach. CAIA Association (with Future Fund, CPP Investments, NZ Super, GIC), 2024.
  6. The TPA Journey. Thinking Ahead Institute, 2025.
  7. Annual Report 2026 (fiscal year to 31 March 2026). CPP Investments, 2026.
  8. Future Fund CIO Ben Samild on Building a Resilient Total Portfolio (transcript). Bridgewater Daily Observations podcast, 2024.
  9. 'Every opportunity has to earn its place': How the Future Fund built a TPA culture that scales. Investment Magazine (L. Maddock), 2026.
  10. Board Education Day: TPA and transition considerations. CalPERS Board, 2025.
  11. Investment Committee transcript (TPA adoption meeting). CalPERS, 2025.