BlackRock has kicked off 2026 with a focused investment strategy. It revolves around three main ideas: artificial intelligence, income generation, and diversification. Jay Jacobs, who leads the exchange-traded funds (ETFs) at BlackRock, shared insights on how ETFs fit into the evolving market landscape while managing over $13 trillion in assets from investors worldwide.
“The first question we need to ask ourselves is where the significant growth opportunities lie today?” Jacobs remarked during an appearance on CNBC’s “ETF Edge” this Monday. He emphasizes that it’s crucial to be highly specific in targeting investments, particularly in sectors like artificial intelligence.
This perspective aligns with BlackRock’s “2026 Annual Outlook” released recently, titled “AI, Income, and Diversification.” Jacobs contends that AI represents a long-term, capital-intensive investment avenue, supported by rising infrastructure spending and productivity gains. The firm isn’t anticipating a downturn in interest towards this investment theme anytime soon.
Among the ETFs focused on AI that BlackRock offers, the iShares AI Innovation and Tech Active ETF stands out, gathering over $8 billion in assets. There are also various other AI ETFs that have recently reached the billion-dollar mark.
- Round Hill Generative AI & Technology ETF (CHAT)
- Ark Autonomous Technology and Robotics ETF
- Global X Robotics and Artificial Intelligence ETF
- Global X Artificial Intelligence and Technology ETF
- iShares Future AI & Technology ETF (ARTY)
- Dan Ives Wedbush AI Revolution ETF (IVES)
Jacobs noted that the concentration of the U.S. stock market might warrant adjustments in equity exposure. With a small number of major tech companies dominating revenue, he referred to these “Magnificent Seven” stocks, which constitute over 40% of the S&P 500 index. “This level of concentration can be viewed as either beneficial or problematic,” Jacobs stated.
Investors are reportedly becoming more cautious about how concentrated their portfolios should be. Some are opting for equal-weight strategies in the U.S. market to mitigate risks associated with heavy concentration.
Jacobs also pointed to the current interest rate environment. He expects the Federal Reserve to make further rate cuts, impacting yields on physical investments. Those who have relied on money markets for income may need to pivot their strategies. “We’re looking at a lower interest rate environment, and it’s imperative to diversify our portfolios to tap into different income sources,” he said.
Diversification completes the triad of BlackRock’s investment strategy for 2026. With market leaders becoming less numerous, volatility is rising, and typical portfolio arrangements—such as the 60-40 split between stocks and bonds—have not been as trustworthy in stressful times. Thus, investors are on the hunt for assets that function independently from stocks and bonds. “Where can we achieve this portfolio diversification?” Jacobs posed.
Overall, Jacobs communicated a crucial takeaway: while investors have enjoyed substantial profits from the U.S. stock market in the past decade, expecting similar returns going forward could be perilous. “In the last ten years, the S&P 500 has had an annualized return of 13.5%, yet many are forecasting lower returns,” he concluded.
