For asset owners adopting the Total Portfolio Approach (TPA), a key opportunity to improve total-fund outcomes is tactical asset allocation, which seeks to capitalize on short-term market dislocations through dynamic allocation across assets. In this paper, we argue that systematic Global Tactical Asset Allocation (GTAA) overlays provide a transparent, scalable, and capital-efficient way to implement such views. By expressing investment opportunities through a rules-based, cross-asset framework, GTAA enables active-risk capital to be deployed in a measurable, repeatable, and governance-friendly manner.

The paper explores how systematic GTAA may help asset owners:

• Diversify sources of return through strategies that can exhibit low or negative correlation to reference portfolios.

• Allocate active risk more effectively by making risk easier to measure, budget and compare across investment opportunities.

• Access a broader opportunity set across asset classes, investment styles and alternative signals.

• Maintain capital efficiency and liquidity through overlays generally implemented using highly liquid futures.

• Strengthen portfolio diagnostics through transparent, rules-based strategies that can help investors better understand macro risk exposures across market regimes.