Latest news with #TargetAllocationETF
Yahoo
21-05-2025
- Business
- Yahoo
BlackRock Adds to AI-Stocks Bet in $160 Billion Model Portfolios
(Bloomberg) -- The world's largest asset manager is adding to bets on the artificial intelligence within its US model portfolios while trimming its overall equity risk because of tariff uncertainty. Can Frank Gehry's 'Grand LA' Make Downtown Feel Like a Neighborhood? Chicago's O'Hare Airport Seeks Up to $4.3 Billion of Muni Debt NJ Transit Makes Deal With Engineers, Ending Three-Day Strike BlackRock Inc. is increasing exposure to AI within its equity-heavy portfolios through the iShares AI Innovation and Tech Active ETF (ticker BAI). The actively managed fund quadrupled in size after it took in roughly $436 million on Tuesday, the largest one-day net inflows since its inception last October. BlackRock's shift underscores how institutional asset managers are reluctant to max out their exposures across the broad stock market, opting instead to lean into the biggest winners of this tech-driven era. BAI has large positions in Nvidia Corp., Broadcom Inc., and Meta Platforms Inc., and has risen 29% over the last month as risk assets rebounded from tariff-driven lows. 'Tech remains one of our highest conviction and longest running portfolio overweights, and within tech AI is the highest conviction drivers,' Michael Gates, lead portfolio manager for BlackRock's $160 billion Target Allocation ETF model portfolio suite, wrote in a memo. While the AI-trade is exposed to tariff headlines and some investors have flagged valuation concerns, some analysts are optimistic on the earnings outlook for artificial-intelligence-linked sectors for the remainder of the year. BlackRock is also paring its equity exposure across its US models after the recent risk-on rally. The asset manager is trimming its overweight on stocks relative to bonds to 1% from 3%, reducing an overweight allocation to growth stocks and adding value stocks outside of the US. Gates said the moves are a response to the uncertainty around trade negotiations and are 'not a reflection of diminished confidence in US exceptionalism.' 'In our view, the more significant concern around tariffs lies in their potential to modestly weigh on global growth, as supply chains may take time to adapt and business confidence remains sensitive to evolving trade dynamics,' he added. The iShares Core S&P 500 ETF (IVV) shed $6.28 billion on Tuesday, the biggest one-day decrease since March, while about $822 million left the iShares S&P 500 Growth ETF (IVW). Meanwhile, the iShares MSCI EAFE Value ETF (EFV) took in a net $912 million, the largest inflow since September. Within its equity-heavy portfolios, it also added to the iShares US Thematic Rotation Active ETF (THRO), which garnered more than $3 billion on Tuesday, the biggest-one day flow ever. In fixed-income, the iShares 0-5 Year Tips Bond ETF (STIP) took in a net $553 million, its biggest inflow since 2022. Model portfolios package together funds into ready-made strategies to sell to financial advisers and institutions. Broadridge Financial Solutions estimates that model assets could reach $11 trillion by 2028, with ETFs seen as a key driver of that growth. Why Apple Still Hasn't Cracked AI Inside the First Stargate AI Data Center Anthropic Is Trying to Win the AI Race Without Losing Its Soul Microsoft's CEO on How AI Will Remake Every Company, Including His Cartoon Network's Last Gasp ©2025 Bloomberg L.P.
Yahoo
28-02-2025
- Business
- Yahoo
BlackRock Adds Its Bitcoin ETF to Model Portfolio for First Time
(Bloomberg) -- The world's biggest asset manager is finally allowing Bitcoin into its $150 billion model-portfolio universe. Cuts to Section 8 Housing Assistance Loom Amid HUD Uncertainty The Trump Administration Takes Aim at Transportation Research Shelters Await Billions in Federal Money for Homelessness Providers NYC Office Buildings See Resurgence as Investors Pile Into Bonds NYC's Congestion Pricing Pulls In $48.6 Million in First Month BlackRock Inc. is adding a 1% to 2% allocation to the $48 billion iShares Bitcoin Trust ETF (ticker IBIT) in its target allocation portfolios that allow for alternatives, according to an investment outlook viewed by Bloomberg. While that's a small subset of BlackRock's entire model portfolio business, the addition opens up a potential avenue of new demand for IBIT at a time when cryptocurrency sentiment is souring. Model portfolios, which package together funds into ready-made strategies to sell to financial advisers, have boomed in recent years and tweaks to their holdings can result in massive flows in either direction. 'We believe Bitcoin has long-term investment merit and can potentially provide unique and additive sources of diversification to portfolios,' Michael Gates, lead portfolio manager for BlackRock's Target Allocation ETF model portfolio suite, wrote in investment commentary dated Feb. 27th. The move by BlackRock comes as Bitcoin prices crater alongside stocks, with a toxic brew of economic concerns and trade tensions weighing on risk appetite. The cryptocurrency is currently trading around $83,000, after reaching nearly $110,000 last month. Bitcoin's famed volatility is a core reason why the asset manager mapped out a 1% to 2% weighting as a 'reasonable range' in a December paper from the BlackRock Investment Institute. At the time it added that anything beyond 2% would sharply increase crypto's share of overall portfolio risk. IBIT's January 2024 launch was one of the most successful debuts on record, with the fund absorbing more than $37 billion worth of inflows last year alone. While appetite has sputtered recently — investors have pulled $900 million over the past week — demand from advisers for exposure within model portfolios was strong, according to BlackRock. 'They all want to allocate more to alternatives, but they need guidance on how to size, scale, and rebalance the position,' Eve Cout, head of portfolio design and solutions for US Wealth at BlackRock, said in an interview. The IBIT addition was just one of several allocation adjustments outlined in Thursday's letter. Cooling earnings expectations led the firm's model-portfolio team to trim its overweight to equities to 3% from 4%, while bringing its tilt to growth strategies versus value trades closer in-line. Within fixed-income, BlackRock is reducing its long-duration exposure. Billions of dollars flowed between several BlackRock products on Thursday as a result. Among the most notable flows was a record $2.3 billion influx into the iShares 10-20 Year Treasury Bond ETF (TLH), while $1.8 billion exited from the iShares 20+ Year Treasury Bond ETF (TLT). A BlackRock spokesperson confirmed that the firm adjusted its model portfolio allocations. 'Our conviction is still in stocks over bonds, US over international, growth over value and tech over the rest of the market,' Gates wrote. 'But the magnitude of each of those directional views is something we look to reduce.' Rich People Are Firing a Cash Cannon at the US Economy—But at What Cost? Trump's SALT Tax Promise Hinges on an Obscure Loophole Warner Bros. Movie Heads Are Burning Cash, and Their Boss Is Losing Patience Walmart Wants to Be Something for Everyone in a Divided America China Learned to Embrace What the US Forgot: The Virtues of Creative Destruction ©2025 Bloomberg L.P. Sign in to access your portfolio
