BlackRock enters 2026 with a clear investment plan built around three pillars: artificial intelligence, revenue, and diversification.
Jay Jacobs, head of exchange-traded funds at BlackRock, explained how ETFs fit into changing market bets by the world’s largest asset manager, which oversees more than $13 trillion from investors. He said investors should continue to focus on growth, but precision will be more important than broad exposure.
“The first question is, what are the biggest growth opportunities in the market today,” Jacobs said Monday on CNBC’s “ETF Edge”. “We need to be laser-focused to try to find some of the targeted exposures that could work very well in this environment, like artificial intelligence.”
This and other investment themes Jacobs shared on ETF Edge are consistent with BlackRock’s 2026 Annual Outlook, “AI, Income and Diversification Factors,” released earlier this week.
BlackRock continues to view AI as a long-term, capital-intensive investment cycle. While infrastructure spending continues to rise, productivity gains and revenue growth are supported by AI-related investments. The company doesn’t think this theme is close to exhaustion.
BlackRock is one of the ETF companies that offers AI-focused funds, including iShares AI Innovation and Tech Active ETF (BAI), which have more than $8 billion in assets.
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By 1Y
There are many other AI ETF options that have grown to over $1 billion in assets in recent years.
Roundhill Generative AI & Technology ETF (CHAT)Ark Autonomous Technology and Robotics ETF (ARKQ)Global X Robotics and Artificial Intelligence ETF (BOTZ)Global X Artificial Intelligence and Technology ETF (AIQ)iShares Future AI & Tech ETF (ARTY)Dan Ives Wedbush AI Revolution ETF (IVES)
Mr. Jacobs cited the high concentration of the U.S. stock market as one reason for tweaking his equity exposure, with a handful of mega-cap tech stocks now accounting for a large share of revenue. The Magnificent Seven stocks account for more than 40% of the S&P 500 index.
”[That concentration] “This is either a feature or a bug. It’s reaching historic levels,” Jacobs said.
Jacobs said investors are responding by being more cautious about how much concentration they want. Some choose to expand their exposure to the U.S. stock market with equal weighting as a way to manage risk.
Jacobs cited the interest rate environment and expectations that the Federal Reserve will cut rates again as reasons for his main focus on income this year, as falling interest rates put pressure on yields on physical investments. Investors who relied on money markets for income may need to change their positions. “We’re in a lower interest rate environment. We expect some rate cuts this year. We need to diversify our portfolio and find new sources of income to generate income from that,” Jacobs said.
Diversification is the third pillar of BlackRock’s 2026 approach to markets. While market leadership is narrower, bouts of volatility are becoming more frequent, and traditional portfolio designs that rely on bonds to smooth out equity risk (typically the so-called 60-40 portfolio) have proven less reliable in times of stress. As a result, investors are looking for assets that behave differently, Jacobs said. “Where can we achieve portfolio diversification?” he said. “It behaves differently than stocks and bonds.”
Mr. Jacobs’ underlying message was that investors have been very fortunate to have generated big profits in the U.S. stock market over the past decade, but it would be dangerous to expect those gains to continue at the same pace. “Over the past 10 years, the S&P 500 has returned an annualized 13.5%, but many expect it to return less than that,” he said.
