BlackRock's Bullish Bet on U.S. Stocks: New ETF Targets Top Performers as AI Drives Growth
BlackRock has recently introduced an ETF aimed at the top 20 largest U.S. companies, named the iShares S&P 500 Top 20 UCITS ETF. This new fund targets European investors, allowing them to invest in major U.S. stocks at a lower cost, with a fee rate of 0.2%. It is listed on the London Stock Exchange, Euronext Amsterdam, and Xetra.
This launch coincides with BlackRock's investment managers expressing a positive outlook on U.S. equities during the company's 2025 Outlook Forum last week. Despite high valuations, BlackRock managers believe that the robust U.S. economy and strong corporate earnings growth have further potential to drive market performance.
Jean Boivin, the head of BlackRock Investment Institute, emphasized the contrast between the U.S. situation and the lagging growth and market performance seen in Europe. Artificial intelligence is a key factor driving the dominance of large technology companies at the top of the S&P 500 index. Boivin remarked that while the long-term economic impact of AI remains challenging to quantify, it's expected to reshape the economy and spur growth.
AI has been a primary reason for BlackRock's increased holdings in U.S. stocks. As tech companies continue to exceed high earnings expectations, the valuations of AI beneficiaries have been well-supported. The decline in inflation is also easing pressure on corporate profit margins. Furthermore, the firm is exploring investment opportunities in AI beneficiaries beyond the tech sector.
In financial updates, Wells Fargo has maintained its rating for BlackRock as 'overweight,' with a new target price set at $1155. BlackRock reported a revenue of $154.23 billion as of September 30, 2024, marking a year-on-year increase of over 12%, with net earnings reaching $48.51 billion, representing a 9% rise.
Moreover, BlackRock's CSRC Interbank Certificates of Deposit AAA Index 7-Day Holding Period Fund recently announced a suspension on large purchases, setting the daily purchase limit at 10 million yuan. The fund, managed by Wang Yang, has seen a 0.12% return over his 30-day tenure.
