How BlackRock, world’s largest fund manager, is shifting market bets
Black Rock It entered 2026 with a clear investment plan built on three pillars: artificial intelligence, income and diversification.
BlackRock’s head of exchange-traded funds, Jay Jacobs, laid out how ETFs will adapt to changing market bets at the world’s largest asset manager, which manages more than $13 trillion from investors. He says investors should continue to focus on growth, but certainty will be more important than broad investments.
“The first one is really what are the biggest growth opportunities in the market today,” Jacobs said on CNBC’s “ETF Edge” on Monday. “That’s where you have to be laser-focused to find some of these targeted risks, like artificial intelligence, that can be very useful in this environment.”
This and other investing themes Jacobs shares on “ETF Edge” are consistent with: BlackRock’s 2026 annual outlook“AI, income, and diversifiers,” published earlier this week.
BlackRock continues to view AI as a long-term, capital-intensive investment cycle. While infrastructure spending remains high, productivity gains and earnings growth are supported by artificial intelligence-related investments. The company does not think the theme is close to extinction.
BlackRock is among the ETF companies that offer AI-focused funds such as iShares AI Innovation and Tech Active ETF (BAI), has accumulated assets of over $8 billion.
BAI 1Y
There are many other AI ETF options that have grown to over $1 billion in assets in recent years:
- Roundhill Generative AI and Technology ETF (CHAT)
- Ark Autonomous Technology and Robotics ETF (ARKQ)
- Global X Robotics and Artificial Intelligence ETF (BOTZ)
- Global X Artificial Intelligence and Technology ETF (AIQ)
- iShares Future AI and Technology ETF (ARTY)
- Dan Ives Wedbush AI Revolution ETF (IVES)
Jacobs cited the high concentration of the U.S. stock market, with a handful of mega-cap tech stocks now commanding an outsized margin of return, among the reasons for fine-tuning equity exposure. ‘Magnificent Seven’ shares account for more than 40 percent S&P 500 Index.
“[That concentration] Jacobs said it was either a feature or a bug. “It’s reaching historic levels.”
Jacobs said investors are responding by being more deliberate about how much concentration they want. Some choose to expand their exposure by equally weighting the U.S. stock market as a way to manage risk.
Jacobs cited the interest rate environment and expectations that the Federal Reserve will cut rates again as a reason to make income a key focus this year as falling interest rates pressure returns on cash investments. Investors who rely on money markets for income may need to reposition. Jacobs said, “We are in a falling interest rate environment. We expect some discounts this year. We need to find new income sources to diversify your portfolio and generate income from it.”
Diversification is the third pillar of BlackRock’s 2026 market approach. Bouts of volatility become more frequent when market leadership is narrow, and the traditional portfolio design that relies on bonds to soften risks from stocks (typically called a 60-40 portfolio) is proving less reliable in times of stress. As a result, Jacobs said investors are looking for assets that behave differently. “Where can you really get diversity for your portfolio?” he said. “Something that will behave differently than stocks and bonds.”
Jacobs’ key message was that investors are very fortunate to have a U.S. stock market that has delivered significant returns over the past decade, but it would be risky to expect that rally to continue at a similar pace. “Over the last 10 years, the S&P 500 has had an annual return of 13.5%, and many expect it to be lower,” he said.
