Betting on US stocks and AI BlackRock 185 billion portfolio

BlackRock, the world's largest asset manager, is "boosting its risk allocation" by significantly increasing its exposure to US equities and artificial intelligence (AI) in its $185 billion model portfolio platform, according to an investment outlook report. BlackRock has increased its allocation to US stocks in its portfolio of models at the expense of international developed market stocks, the outlook said, thanks to the "top-notch earnings performance" of US stocks. After the adjustment, the portfolio's equity holdings were overweight by 2%. The data showed that on Tuesday (the day of the adjustment), as BlackRock completed the asset allocation adjustment, billions of dollars of funds were flowing between its corresponding exchange-traded funds (ETFs). BlackRock's revamp of its model portfolio is a vote of confidence in the rally in US stocks: the S & P 500 Index has hit an all-time high this year, fuelled by an investment boom in AI and superimposed on bets that the Federal Reserve is about to start a rate-cutting cycle. BlackRock said in its investment report that the relatively strong earnings performance of US companies will drive US stocks higher, noting that since the third quarter of 2024, US corporate earnings have grown by 11%, compared with similar companies in other developed markets. Earnings have increased by less than 2%.