Manulife Refines Investment Strategy Amid Market Shifts

Nathan Thooft outlines a new approach to portfolio construction and artificial intelligence at a Toronto industry event.

Updated on Oct. 26, 2026 in Investing

Manulife Refines Investment Strategy Amid Market Shifts

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At the October 6, 2026, ETFs NOW event in Toronto, Nathan Thooft of Manulife Investment Management discussed shifts in portfolio construction. The firm has adapted its strategy to prioritize resilience as market conditions evolve.

Why it matters

The firm is adjusting its holdings to mitigate risks from a rising default cycle and structural inflation. By integrating real assets and AI-focused strategies, Manulife aims to maintain portfolio performance despite increased volatility.

Passive ETFs captured 54% of flows in the second quarter of 2026, while asset-allocation ETFs accounted for 20% of total flows in the first half of the year. Structural inflation is projected to remain 0.5% higher than pre-Covid levels for the next decade.

The players

Nathan Thooft

He leads the multi-asset solutions team at Manulife Investment Management and oversees nine all-in-one portfolios.

Manulife Investment Management

This global asset manager provides investment solutions and manages diverse portfolios for institutional and individual clients.

The details

Thooft, who oversees nine all-in-one portfolios, is currently underweight duration in fixed-income holdings due to fears regarding the default cycle. To capture AI-driven growth, the team utilizes the LIFT acronym, targeting life sciences, industrials, financials, and technology.

Asset-allocation ETFs received 15% of flows in 2024.
Asset-allocation ETFs received 17% of flows in 2025.
Asset-allocation ETFs accounted for 20% of investment flows in the first half of 2026.
Passive ETFs captured 54% of flows during the second quarter of 2026.
Nathan Thooft presented at the ETFs NOW event on October 6, 2026.

Market Dynamics

This strategy reflects a departure from the historical role of fixed income as a portfolio diversifier in favour of real assets. It addresses structural changes in the macroeconomic environment, including persistent inflation and higher cyclicality in markets.

Investors may see a shift in the composition of multi-asset portfolios as firms reduce exposure to traditional fixed-income products. These adjustments are designed to protect capital against long-term inflation trends and potential increases in corporate defaults.

The takeaway

Investors should consider how structural inflation and market volatility might necessitate a broader mix of asset classes. Diversifying beyond traditional fixed income is a key takeaway for those navigating a decade of expected economic cyclicality.