According to BlackRock, traditional portfolio management techniques are becoming less effective due to transformative factors such as AI advancements, demographic changes, and geopolitical fragmentation. Strategists led by Jean Boivin recommend that investors frequently reassess their portfolio decisions and maintain a contingency plan.
BlackRock is particularly optimistic about sectors linked to the AI boom, including semiconductors, power systems, and data centers, which are expected to thrive regardless of which companies dominate the market. The firm also holds a positive outlook on U.S. equities, citing strong earnings growth and the anticipated positive impact of AI on corporate profits.
In emerging markets, BlackRock favors nations that produce essential AI components and commodity exporters likely to benefit from rising energy prices. The asset manager advises investors to prioritize a company's business model and revenue sources over its stock listing location. On the fixed income front, BlackRock is cautious about long-duration government bonds, particularly U.S.
Treasurys, due to inflation risks and rising yields. Instead, it recommends emerging-market hard-currency debt and U.S. agency mortgage-backed securities for better income potential. Looking ahead, BlackRock sees value in infrastructure equity and private credit, driven by demand from AI and geopolitical shifts, while noting an expected increase in return variability in private credit investments