BlackRock has adopted a notably active stance on portfolio positioning, renewing its overweight call on US equities this week – just one week after shifting to a neutral view.
The sudden vote of confidence comes after the S&P 500 rebounded nearly 6 per cent last week, with one of its largest daily jumps in its history after the pause on “reciprocal” tariffs.
While it remains some 13 per cent below its February record high, BlackRock believes US equities can “regain their global leadership”.
“US equities are supported by the AI theme, resilient corporate earnings and a so far solid economy,” it said, adding that it has extended its tactical horizon back to six to 12 months to dial up risk, after moving to three months last week.
“The broad-based equity sell-off has created opportunities to tap into certain sectors, and selectivity is key,” it added, noting it still favours US technology and banks given the scope for deregulation.
Last week, BlackRock said it is reducing equity exposure, including to US and Chinese stocks, and allocating more to short-term US Treasuries.
“If clarity comes quickly, we would up risk-taking again,” the asset management giant said at the time.
At the moment, BlackRock remains overweight short US Treasuries, viewing them as “akin to cash”; however, it prefers gold over long-term Treasuries as a portfolio diversifier.
The asset management giant also recently upped European stocks to neutral but said its focus is on “selective opportunities while looking for more progress on structural challenges”.
BlackRock’s positioning stands in contrast to many of its peers, with T. Rowe Price, for instance, reaffirming this week that it remains underweight US equities and overweight Europe.
The firm pointed to a “difficult near-term environment” for US equities driven by heightened policy uncertainty, while European stocks are supported by “economic surprises, the potential for fiscal spending and more attractive valuations”.
BlackRock moves overweight Japan
BlackRock also shifted to an overweight position on Japanese equities this week, citing the return of inflation and a wave of shareholder-friendly corporate reforms as key drivers.
“We prefer unhedged exposure as the yen has tended to strengthen during bouts of market stress,” it said.
Meanwhile, the asset management giant is neutral China on the back of “uncertainty of tariffs and trade barriers”.
“Structural challenges to China’s growth and tariff risks also weigh on our outlook,” it said.
On the contrary, T. Rowe Price is neutral Japan and overweight emerging markets, like China, noting that sentiment in China is improving on policy support hopes despite tariff threats.
