• Diversification has become a key response to uncertainty in the global economy.
• More diversified portfolios can be more resilient in adverse scenarios, and asset managers have clearly embraced this approach. Exchange-traded products (ETPs) have gained prominence as efficient tools for portfolio diversification.
• Models such as FlexFunds’ expand access to sophisticated global strategies through tailor-made structured vehicles. For more information, please do not hesitate to contact our team of experts.

Asset diversification has become one of the main tools for mitigating risk in an environment shaped by geopolitical tensions, uncertain monetary cycles, and markets that are highly sensitive to macroeconomic data.

For asset managers, accessing a balanced combination of fixed income, equities, commodities, and alternative assets on a global scale has become essential to preserve and optimize capital.

Today, structures such as exchange-traded products (ETPs) and other flexible vehicles allow managers to integrate global assets into their portfolios to reduce risk during periods of heightened uncertainty.

FlexFunds, a leading provider for asset managers in the design and issuance of investment vehicles (ETPs), shares key insights on building diversified portfolios in light of the challenges ahead in 2026. The FlexFunds platform supports portfolio diversification by transforming a wide range of strategies and assets into listed, liquid, and customized ETPs, making it easier to incorporate new exposures in a simple and efficient way.

Diversifying portfolios

Effective diversification involves allocating a portfolio across different asset classes while also diversifying within each class.

This includes, for example, investing in different equities (by sector or country), different bonds (by maturity and issuer), and various commodities through instruments that provide exposure to these assets.

Asset allocation has evolved beyond the traditional 60/40 model, and in this context, there is no single formula for structuring a portfolio, given the wide range of possibilities depending on risk profile.

According to an analysis by IG, a conservative profile suggests allocating 80% of the portfolio to bonds and 20% to short-term investments, prioritizing capital preservation.

A balanced profile distributes risk more evenly, with 44% in bonds, 42% in foreign equities, 5% in local securities, 5% in commodities, and 4% in short-term investments.

An aggressive profile is focused primarily on growth, with 69% in foreign equities, 17% in bonds, 9% in local equities, and 5% in commodities.

IG notes that more conservative portfolios typically offer lower returns but also experience more limited drawdowns.

Conversely, higher-risk portfolios tend to perform better during growth phases but suffer more during recessions.

The balanced portfolio sits at an intermediate point, precisely due to diversification.

In an environment of high uncertainty, distributing risk across assets, sectors, and geographies has become a priority for managers.

“Diversification helps reduce the correlation between the assets in which one is invested, which creates the opportunity to improve returns and reduce portfolio volatility,” according to a document by investment manager BlackRock.

The firm explains that diversification can be achieved across different asset classes, economic sectors, or by combining assets and sectors from different geographies to better withstand market shocks.

Experience in recent years has shown that concentrating portfolios in a single region, currency, or asset class amplifies exposure to external shocks.

By contrast, more flexible investment structures may help cushion volatility, capture tactical opportunities, and reduce dependence on a single economic cycle.

The role of ETP

ETPs facilitate diversification by consolidating a basket of assets—spanning different asset classes, sectors, and geographies—into a single instrument.

In this way, they reduce idiosyncratic risk and dependence on a single market, while offering flexibility and efficient access to global strategies.

These instruments are characterized by replicating the performance of a benchmark index, such as the S&P 500, or other underlying assets, and are traded on exchanges like equities.

While ETPs are not expected to outperform the underlying asset they replicate, they may represent a more efficient and convenient alternative than direct trading, according to a report published by IG analysts.

ETPs have positioned themselves as an efficient way to implement international strategies without operating directly across multiple markets.

According to financial institution BBVA, “there is no minimum imposed on the amount invested and no upfront repayment charges” for ETPs.

Another key advantage is that ETPs provide exposure to markets that are not easily accessible through traditional channels.

“In some cases, ETPs represent the only way to gain exposure to certain underlying markets that are not available through traditional trading methods, such as exotic equities or indices,” notes the IG article.

Different strategies

ETPs cover a wide range of diversification strategies depending on the underlying asset they seek to replicate.

While bond ETPs focus on fixed income and typically attract flows during periods of heightened risk aversion, currency ETPs provide exposure to foreign exchange markets and replicate the performance of a specific currency.

There are also leveraged ETPs, designed to amplify short-term market movements, carrying significantly higher risk.

The FlexFunds model and the expansion of regional diversification

FlexFunds offers an asset securitization program to develop ETPs and help asset managers optimize their operations.

The FlexFunds model focuses on structuring customized ETPs that replicate international managers’ strategies and make them accessible to offshore investors—non-U.S. investors—under Regulation S.

This approach allows institutional investors, family offices, and high-net-worth individuals in Latin America to access sophisticated global strategies without the need to operate directly across multiple jurisdictions or complex structures.

For asset managers, customized structured ETPs enable the channeling of an international strategy—integrating equities, debt instruments, and commodities—into a single vehicle.

Effective diversification aims to combine low-correlation assets to stabilize portfolio results.

In this way, managers achieve diversified allocation across assets, sectors, and regions without the complexity of managing multiple markets.

These structures allow international strategies—from sovereign and corporate debt to equities, commodities, or alternative strategies—to be packaged into instruments that trade like traditional securities but follow a global allocation logic.

The appeal of these vehicles lies in their ability to simplify access to international markets, reduce operational friction, and allow investors to adjust their exposure swiftly in response to changes in the global financial environment.

In this context, digital asset ETPs reached an all-time high of US$218.1 billion in assets under management worldwide by the end of September 2025, after growing by 6.3% and recording three consecutive months above US$200 billion, according to data from Finequia.

Diversification as a strategy in high-uncertainty cycles

During periods of elevated uncertainty, diversification ceases to be merely a defensive concept and becomes an active risk management strategy.

Combining assets with different correlations can help stabilize returns and smooth portfolio volatility.

For Latin American managers, having flexible vehicles that facilitate global access represents a strategic advantage in an environment where external shocks are expected to remain a constant in 2026.

Rather than pursuing extraordinary short-term returns, the focus is on building resilient portfolios capable of adapting to different macroeconomic and financial scenarios. If you would like more details, you may contact one of our representatives who will address your specific needs.

Fuentes:

• https://www.ig.com/es/estrategias-de-trading/-que-es-un-producto-negociado-en-bolsa–etp–0-190204
• https://www.ig.com/en/trading-strategies/how-to-diversify-your-portfolio-200807
• https://www.bbva.com/en/trading-etps-learn-bbva-trader
• https://fineqia.com/reasearch-article?id=september-2025-etp-monthly-report-global-digital-asset-based-exchange-traded
• https://www.blackrock.com/cl/educacion/que-es-diversificacion