BlackRock Investment Institute said it remains overweight on US and Japanese equities, citing support from artificial intelligence, corporate earnings strength and structural reforms.
In its latest weekly commentary, the firm says traditional static asset allocation “no longer suffices” in a world shaped by mega forces such as digital disruption, geopolitical fragmentation and demographic divergence, favoring instead a scenario-based approach to portfolio construction.
“We see the AI theme supported by strong earnings, resilient profit margins and healthy balance sheets at large listed tech companies. Continued Fed easing into 2026 and reduced policy uncertainty underpin our overweight to U.S. equities.”
The firm is also overweight Japan.
“We like Japanese equities on strong nominal growth and corporate governance reforms… We are overweight. Strong nominal GDP, healthy corporate capex and governance reforms – such as the decline of cross-shareholdings – all support equities.”
BlackRock added that it remains selective in Europe, “favoring financials, utilities and healthcare.”
In fixed income, BlackRock said, “we prefer EM due to improved economic resilience and disciplined fiscal and monetary policy.”
The institute reiterated that investors should revisit key portfolio decisions more frequently as long-term economic outcomes grow more uncertain.
Overall, BlackRock Investment Institute signaled conviction in U.S. and Japanese equities while urging investors to adopt a more dynamic, scenario-based approach as mega forces reshape global markets.
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