BlackRock is recalibrating its investment strategy, moving away from traditional macro anchors towards “mega forces” like artificial intelligence, which they believe will be “durable drivers of returns” in both the near and long term.
What Happened: This shift is detailed in their latest commentary, which emphasizes a more tactical approach to investing in a world where long-term macro stability is diminishing.
The firm notes that while “long-term macro anchors markets have relied on for decades, like stable inflation and fiscal discipline, have weakened,” this doesn’t necessitate a reduction in risk-taking.
Instead, mega forces or AI-related investments offer a “new anchor for returns.”
BlackRock also highlights the role of “immutable economic laws” in limiting the pace of global change, such as the inability to rewire supply chains overnight and the reliance of U.S. debt sustainability on foreign funding.
This perspective keeps BlackRock “risk on and overweight U.S. equities.”
Despite recent U.S. stock gains driven by the AI theme and a backdrop of persistent sticky inflation, the firm sees “scope for overall corporate earnings to stay solid even if U.S. growth is dented by tariff-induced disruptions and corporate caution.”
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Why It Matters: BlackRock anticipates that sticky inflation will prevent the Federal Reserve from significant rate cuts, and high fiscal deficits in the U.S. may prompt investors to seek a greater term premium on long-term debt.
The firm stresses that in this volatile environment, “set-and-forget portfolios no longer serve investors well,” advocating for active management across asset classes.
“Greater dispersion in market and security returns means more opportunity to capture alpha,” they conclude, reinforcing their belief that mega forces or AI investments will be pivotal in driving future returns.
Here are a few AI-linked exchange-traded funds that investors could consider amid ongoing optimism about the sector.
| ETF Name | YTD Performance | One Year Performance |
| iShares US Technology ETF (NYSE:IYW) | 9.19% | 11.00% |
| Fidelity MSCI Information Technology Index ETF (NYSE:FTEC) | 7.44% | 11.23% |
| First Trust Dow Jones Internet Index Fund (NYSE:FDN) | 10.49% | 28.91% |
| iShares Expanded Tech Sector ETF (NYSE:IGM) | 10.06% | 15.00% |
| iShares Global Tech ETF (NYSE:IXN) | 9.53% | 6.96% |
| Defiance Quantum ETF (NASDAQ:QTUM) | 12.05% | 42.81% |
| Roundhill Magnificent Seven ETF (BATS:MAGS) | 1.66% | 12.74% |
The SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 index and Nasdaq 100 index, respectively, were higher in premarket on Tuesday. The SPY was up 0.11% at $621.36, while the QQQ advanced 0.26% to $553.47, according to Benzinga Pro data.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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