The Long View Michael Gates: Why More Advisors Are Migrating to Model Portfolios
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Apr 21, 2026 
Michael Gates, BlackRock’s head of Model Portfolio Solutions and veteran portfolio manager, discusses why advisors increasingly use model portfolios. He covers how tax overlays and rebalancing with risk shape model design. He explores AI’s role in productivity and how to build thematic AI and defense exposures. He also explains when active management adds value and how tech will change model implementation.
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Whole Portfolio Risk Budgeting Is Central
- BlackRock builds models with a whole-portfolio mindset focused on diversification and risk budgeting.
- They center allocations around a risk target benchmark and use Aladdin to analyze holdings' shared risk factors down to each security.
Productivity Shock Favors Stocks And Lowers Inflation
- BlackRock expects a productivity-led growth impulse, partly driven by AI, which is positive for real GDP and negative for inflation.
- That backdrop supports equities but fixed-income credit spreads remain tight, limiting compensation for credit risk.
Cut Risk Where Compensation Is Poor
- Manage risk by reducing exposures where compensation is poor, such as underweighting credit when spreads are tight.
- Keep equity overweight while cutting credit and precious metals when returns no longer justify risk.