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General Investing Powered by BlackRock® – March 2026 Reoptimisation

04 March 2026

Market Overview and Impact

Financial markets entered 2026 with elevated volatility from rising geopolitical risks and renewed tariff measures. Despite these headwinds, the macro backdrop has remained supportive, with the US Federal Reserve (Fed) delivering a 25 bps rate cut in December and leaving the door open to further adjustments in the future.

Supported by accommodative US monetary policy and ongoing fiscal stimulus across major developed markets, BlackRock remains constructive on global growth and maintains a risk-on stance. It is worth noting that short-term flare-ups may distract investors from underlying fundamentals from time to time, reinforcing the need for a well-diversified approach to portfolio management.

On the fixed income side, BlackRock maintains an underweight in duration and prefers to take risk elsewhere, as market expectations for further easing could potentially shift. BlackRock continues to prefer emerging market bonds, supported by a favourable macro environment, their relatively under-owned status versus equities, and the diversification benefits they offer to US assets.

BlackRock maintains a basket of diversifiers to seek returns beyond traditional equities and bonds. In particular, they are increasing allocation to gold, supported by sustained central bank purchases and heightened geopolitical risks that continue to boost safe-haven demand.

Conservative, Balanced and Aggressive Portfolios

Performance Commentary

Key takeaways

BlackRock is increasing its equity overweight from 2.5% to 5%, as they believe global growth remains supported by more accommodative and fiscal policies in key markets
Remaining constructive on emerging market equities, while reducing US overweight and broadening exposures to Europe, Japan and Canada
Maintaining an underweight in duration as expectations for further easing could potentially shift

Adding further to gold as a diversifier amid geopolitical risks, sustained central bank purchases, and policy uncertainty

Supported by accommodative US monetary policy and ongoing fiscal stimulus across major developed markets, BlackRock remains constructive on global growth and maintains a risk-on stance, increasing their equity overweight from 2.5% to 5%. It is worth noting that short-term flare-ups may distract investors from underlying fundamentals from time to time, reinforcing the need for a well-diversified approach to portfolio management.

Within equities, BlackRock continues to take a constructive view on emerging market equities, while reducing US overweight and broadening allocation to Europe, Japan and Canada as market leadership diverges. Emerging markets remain attractive, supported by solid earnings growth, compelling valuation, and a generally favourable backdrop during Fed easing cycles.

Meanwhile, within their US allocation, BlackRock is trimming some broad market-cap exposures and reallocating toward selective sectors to achieve more targeted positioning. This includes industrials supported by renewed defense spending, value themes, AI and data center infrastructure, and small caps that should benefit from a broadening market rally and a rate cut environment. These positions were partially funded by selling exposures to the technology sector, where divergence between capital expenditure and earnings has been increasing.

BlackRock is adding to European equities and reducing its underweight, reflecting improving earnings momentum and the benefits of fiscal expansion, particularly in Germany. Elsewhere, they are increasing allocation to Japanese equities, driven by improved political stability and pro-growth policies following the Liberal Democratic Party's (LDP) decisive victory, while favouring hedged exposure given downside risks to the Japanese yen. BlackRock is also adding to Canadian equities, which demonstrate strong fundamentals as well as positive sentiment and momentum based on their quantitative analysis.

On the fixed income side, BlackRock maintains an underweight in duration and prefers to take risk elsewhere, as market expectations for further easing could potentially shift. To fund the equity overweight, they are reallocating from cash proxies, investment-grade credit, and high-yield exposures where spreads remain relatively tight. BlackRock continues to prefer emerging market bonds, supported by a favourable macro environment, their relatively under-owned status versus equities, and the diversification benefits they offer to US assets.

Very Aggressive Portfolio

Reoptimisation Commentary

Financial markets entered 2026 with elevated volatility from rising geopolitical risks and renewed tariff measures. Despite these headwinds, the macro backdrop has remained supportive, with the US Federal Reserve (Fed) delivering a 25bps rate cut in December and leaving the door open to further adjustments in the future.

Supported by accommodative US monetary policy and ongoing fiscal stimulus across major developed markets, BlackRock remains constructive on global growth. It is worth noting that short-term flare-ups may distract investors from underlying fundamentals from time to time, reinforcing the need for a well-diversified approach to portfolio management.

BlackRock continues to take a constructive view on emerging markets equities, while reducing US overweight and broadening allocation to Europe, Japan and Canada as market leadership diverges. Emerging markets remain attractive, supported by solid earnings growth, compelling valuation, and a generally favourable backdrop during Fed easing cycles.

Meanwhile, within their US allocation, BlackRock is trimming some broad market-cap exposures and reallocating toward selective sectors to achieve more nimble positioning. This includes industrials supported by renewed defense spending, value themes, AI and data-center infrastructure, and small caps that should benefit from a broadening market rally and a rate-cut environment. These positions were partially funded by selling exposures to the technology sector, where divergence between capital expenditure and earnings has been increasing.

Source: BlackRock. Rebalance date is 4 March 2026.

This information should not be relied upon as investment advice, research, or a recommendation by BlackRock regarding (i) the iShares Funds, (ii) the use or suitability of the model portfolios or (iii) any security in particular. Only an investor and their financial advisor know enough about their circumstances to make an investment decision. Past performance is not a reliable indicator of future results and should not be the sole factor of consideration when selecting a product or strategy.

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