Global investors are entering 2026 with a more focused and selective mindset, guided by BlackRock’s latest market outlook. The world’s largest asset manager has built its strategy around 3 core pillars artificial intelligence, income and diversification. While growth remains important, BlackRock believes investors now need targeted exposure instead of broad market bets to navigate changing market conditions.
Jay Jacobs, Head of Equity Exchange Traded Funds at BlackRock, explained this shift during a recent appearance on a business television show. He said investors must identify where growth opportunities are strongest and concentrate on those areas. “The first is really what are the biggest growth opportunities in the market today,” Jacobs said. “Where you have to get laser focused to try and find some of these targeted exposures, like artificial intelligence, that could do very well in this environment.” His comments align with BlackRock’s 2026 annual outlook titled “AI, Income & Diversifiers.”
BlackRock continues to see AI as a long term and capital intensive investment cycle. The firm expects infrastructure spending to stay elevated, supported by productivity gains and earnings growth linked to AI investments, and does not believe the theme is nearing exhaustion. BlackRock offers multiple AI focused ETFs, including the iShares A.I. Innovation and Tech Active ETF with more than $8 billion in assets. Other AI related ETFs with assets above $1 billion include funds from Roundhill, Ark, Global X, iShares, and Dan Ives.
Jacobs also pointed to rising concentration in the US equity market, where a small group of mega cap technology stocks known as the “Magnificent Seven” now make up over 40% of the S&P 500 Index. “That concentration is either a feature or a bug,” Jacobs said. “It’s reaching historical levels.” With interest rate cuts expected this year, BlackRock sees income as a key focus as cash yields fall. Diversification remains the third pillar, as traditional strategies such as the 60 40 portfolio are proving less reliable during periods of market stress. Jacobs added that while the S&P 500 delivered an annualised return of 13.5% over the last 10 years, investors should not expect the same pace to continue.
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