BlackRock Investment Institute Forecasts Major Shift in Global Economy

Strategists at BlackRock forecast a colossal shift that will transform the structure of the global economy, but also detailed moves that investors can make to capitalize on these changes. The path of the transformation could shift over time – and potentially suddenly. This theme is about looking for the next wave of investment opportunities and positioning portfolios accordingly.

Subdued growth, stubborn inflation. Growth slows to a lower trend pace, inflation is sticky above target, and policy rates stay higher. However, BlackRock Investment Institute on Monday cut its rating on developed market equities to 'neutral', after being 'overweight' since the end of a decade-long bull market.

BlackRock became the world's largest asset manager in part because of its passive investment vehicles that have ballooned in size. However, the institute now expects U.S. equity returns to lag developed and emerging markets over the next 10 years. This suggests a shift towards more active management strategies.

The AI juggernaut that has fueled the S&P 500 rally this year is expected to keep driving returns over the next six to 12 months, according to BlackRock's analysis. The institute emphasizes the importance of staying ahead of technological advancements and trends in order to remain competitive in the market.

World's largest asset manager lays out the impact of major reforms of multilateral development banks ahead of COP28. This indicates a focus on sustainable investing and the potential for new opportunities in environmentally friendly sectors.

BlackRock Inc., which capitalized on a decade-long boom in index investing, said investors should rely more heavily on actively managed strategies in the current market environment. This shift in strategy reflects the changing landscape of the global economy and the need for a more dynamic approach to investment management.