Hi, I'm Tushar Yadava, and I'm here to give you a quick update on the latest changes to our asset allocation views from the BlackRock Model Portfolios, and why we believe they make sense in the current market environment.
First off, we’re increasing an overweight to stocks
We’ve nudged our market risk higher, adding to equities and positioning the portfolio overweight stocks relative to bonds, and US relative to DM ex-US, while emerging equities tilt ever so modestly higher in weight.
Why? The US market continues to deliver robust earnings and sales growth, standing out versus developed markets abroad.
Since the same quarter last year, US companies have delivered 11% earnings growth, compared to less than 2% for DM ex-US.
Simultaneously, the US labor market has softened, opening the door for more accommodative monetary policy. History tells us: don’t fight the Fed. We’re leaning into that tailwind, but with seatbelts on.
Secondly, we’re focusing on AI and Thematic Opportunities
We’re shifting our entire tech bet to focus squarely on AI— and not just the compute, the chips and the models and agents, but also the “picks-and-shovels†of the next industrial revolution.
Think infrastructure, compute, cloud, and software.
Demand for high-performance computing is outpacing available infrastructure, and our Technology Equity team sees AI infrastructure spend at roughly 0.5% of global GDP. That’s around half a trillion dollars annually, with commitments likely to accelerate.
We see generative AI as a durable, multi-year trend—one that’s not only an opportunity in portfolios, but also a new economy hedge, as AI is creating a new class of market leaders and fundamentally reshaping economic value.
We’re accessing this theme through dedicated active strategies, rotating across AI-adjacent opportunities as dispersion widens, and hunting for the next wave of winners as narratives evolve.
Finally, we’re coupling our offensive positioning with a defensive ballast
While we’re leaning into select growth opportunities, we’re equally focused on maintaining discipline where signals are less clear.
Lower real rates remain historically friendly to precious metals, so we’re holding—and modestly adding to these as hedges against policy uncertainty, fiscal dominance, and geopolitical risks.
Convertible bonds also play a key role, offering “upside with airbagsâ€â€”participating in market gains, especially with their tech exposure (which is different to traditional bond issuers), while preserving downside resiliency if growth stumbles.
Rising fiscal commitments are fueling multi-year modernization cycles in aerospace and defenses infrastructures globally, so we’re initiating a thematic allocation, targeting beneficiaries of this new era of “national resilience.â€
For more information, please check out our latest moves on the advisor center, or reach out to your BlackRock market teams. Thanks for watching.
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