BlackRock has signalled a shift in its investment strategy, turning tactical and focusing on the short term in the belief that long-term investing frameworks are vulnerable in today’s volatile environment.
In the latest commentary, BlackRock Investment Institute head Jean Boivin said the asset management giant is “investing in the here and now – and putting more weight on our short-term views” as recent shocks to inflation, policy and fiscal sustainability have made traditional long-term signals less reliable.
Markets have faced a series of disruptions in 2025, from new US tariffs, persistent inflation and shifting central bank narratives. BlackRock views these as symptoms of a deeper breakdown in the macroeconomic structures that have guided investors for years.
“Long-term macro anchors that markets have relied on for decades, like stable inflation and fiscal discipline, have weakened,” Boivin said.
As a result, the firm is tilting away from an emphasis on long-term, strategic positioning. “In this volatile environment, we think it is important to carefully manage macro risk: set-and-forget portfolios no longer serve investors well,” Boivin said.
Rather than depending on broad macro forecasts, BlackRock is leaning on what it calls “immutable economic laws” to guide near-term decisions. These include structural limits on supply chains and the US government’s continued dependence on foreign financing.
“We see immutable economic laws limiting policy shifts and narrowing near-term outcomes: supply chains can’t be rewired overnight and US debt sustainability relies on large foreign funding,” the strategist explained.
These constraints, he argued, provide more clarity in the near term than longer-range projections.
At the same time, BlackRock is turning to five ‘mega forces’ – AI and digital disruption, demographic divergence, geopolitical fragmentation, the future of finance and the low-carbon transition – as long-term thematic drivers.
“Mega forces offer a new anchor for returns,” Boivin said, though he cautioned they do not map neatly onto growth or inflation outlooks.
“They don’t provide a clear handle on the growth and inflation outlook, unlike macro anchors, and don’t map into broad return drivers,” he explained.
“Instead, we need to track their evolution across and within asset classes, get granular with themes and constantly adapt to what’s priced in.”
BlackRock said there is a growing opportunity for active investors as market dispersion increases. “Greater dispersion in market and security returns means more opportunity to capture alpha,” Boivin said.
In terms of positioning, the firm remains overweight US equities, citing AI as a key earnings driver and suggesting US stocks are best positioned to lead in the current cycle.
“We think US equities will regain global leadership as the AI theme keeps providing near-term earnings support and could drive productivity in the long term,” the firm said.
In addition, the Trump administration is planning tax and regulatory reforms that would bolster investor sentiment towards the US, including the permanent lowering of the corporate tax rate to 21%.
Although European equities are outperforming US stocks over 2025 so far, Boivin noted that past reversals in favour of Europe have “always faded”. He suggested Europe needs to advance its structural reforms to change that trend.
Elsewhere, BlackRock favours Japanese equities, short-term US treasuries, agency mortgage-backed securities and eurozone government bonds.
In contrast, it is underweight long-term US treasuries, citing fiscal deficits and inflation pressures: “Persistent budget deficits and inflation pressures could drive term premium up over the long term.”
The investment house is neutral on several assets, including UK, European and emerging market stocks as well as fixed income from many of these areas.