MARKET MINUTE FROM BLACKROCK FUNDAMENTAL EQUITIES

Investing in healthcare stocks after COVID-19

Jun 3, 2022
  • BlackRock

Healthcare conversations over the past two years have focused almost exclusively on COVID-19. Yet the dynamic and diverse sector offers a lot more to talk about. BlackRock’s Erin Xie and Eli Lilly CEO David Ricks did just that in a recent dialogue.

The response from pharmaceutical companies to the COVID-19 pandemic was epic. But has it distracted from or amplified the broader opportunities and innovation within the healthcare sector?

In a recent video, Dr. Erin Xie, Head of the Health Science team within BlackRock Fundamental Equities, and David Ricks, CEO of pharmaceutical company Eli Lilly, discuss the future of healthcare after COVID, the question of regulation, and whether dented valuations present a buying opportunity.

Playing catch-up after COVID

COVID cases are ebbing and government restrictions have been lifted across much of the developed world, prompting Dr. Xie to pose the biggest question of all: How might this pandemic evolve?

Mr. Ricks’ view: The endemic phase is near. “The virus is migrating in a way viruses do. They become more infectious and less virulent,” he explains. “But at some point, it will be a seasonal coronavirus that we'll talk about for the rest of our lives.”

Mr. Ricks credits the progress to the effectiveness of vaccines and treatments.

“We’re here two years in, which is a very short time scale for development and discovery of new medicines and vaccines,” he says. “Although the variant evolution continues, the viral drift occurs … many of these solutions retain their effectiveness.”

As the pandemic wanes, Dr. Xie believes innovation across the pharmaceutical sector can accelerate, especially in biotechnology ― an area that uses material from living organisms to create medicines. Dr. Xie sees exciting developments coming in the treatment of cancer, immunology, genetic and neurodegenerative diseases. She finds attractive opportunities primarily in small- and mid-cap biotech companies with innovative pipelines and strong product results.

“I think the science is actually moving a lot faster than a few years ago,” she says, providing hope that it manifests in drug development.

Beyond biotech, Dr. Xie sees med-tech offering investors opportunities to capitalize on innovation. While the healthcare sector has been slow to embrace technological change, the momentum is beginning to shift. This should lead to progress in areas such as precision surgical tools and minimally invasive procedures, as well as the growing trend of wearable tech and connected devices such as glucose monitoring systems.

The question of regulation

Dr. Xie asks whether the pharmaceuticals industry will get political credit for helping to hasten the end of the pandemic, and whether the thorny question of regulation ― for example around drug pricing ― should remain an investor concern.

Mr. Ricks credits a “positive pricing environment in the U.S.” with allowing the rapid development of vaccines and COVID treatments: “For decades in advance, we built up a massive industrial infrastructure around antibody, small-molecule manufacturing, RNA therapeutics that were meant for other purposes. And that investment thesis was redirected to COVID.”

Yet he notes some policy changes would be welcome to benefit patients, pointing to a “broken reimbursement system” where some patients still bear high costs for their medicines.

Dr. Xie agrees that major regulatory reform is unlikely but certain government policy changes are necessary ― and could even provide a boost to the healthcare sector by removing some of the longstanding “political overhang” that has contributed to investor trepidation.

A view on valuations

The fear of regulatory action and potential for it to dent profit margins is one reason healthcare stocks are available at a discount to the market. See the chart below. Biotech stocks especially have struggled over the past 12 months amid little progress in the clinical development of new treatments (COVID-19 successes aside).

A sector “on sale”
Healthcare stocks are trading at a discount to the market

Bar chart shows valuations for global stocks, the healthcare sector and the biotech subsector.

Source: BlackRock Fundamental Equities, as of March 31, 2022. Figures shown reflect the price-to-earnings (PE) ratio of the broad market as represented by the MSCI World Index versus the healthcare sector and biotechnology components in it. It is not possible to invest directly in an index.

Other areas sport loftier valuations, making selectivity in the healthcare sector key. Mr. Ricks identifies delivery systems for gene and RNA therapies, for example, as “very hot.”

Longer-term, Dr. Xie sees the sector well supported by the continuation of secular growth drivers. Aging societies mean that demand for healthcare products and services is poised to grow for decades to come.

Harnessing change in healthcare

June 2022 – COVID-19 has dominated healthcare conversations for two years. But has it distracted from or amplified the broader opportunities and innovation within the healthcare sector? Dr. Erin Xie, Head of Health Sciences within BlackRock Fundamental Equities, sat down with David Ricks, CEO of pharmaceutical company Eli Lilly, to discuss the sector’s future.

Watch the full conversation below: 

Expert to Expert

A BlackRock Fundamental Equities video series

Episode 4: Harnessing change in healthcare

Carrie King

Deputy CIO of Developed Markets,

BlackRock Fundamental Equities

Erin Xie

Head of Health Sciences,

BlackRock Fundamental Equities

David A. Ricks

Chair and CEO

Eli Lilly and Company

[00:10] CARRIE: Welcome to Expert to Expert, a BlackRock Fundamental Equities video series that pairs our investment pros with the business heads, politicians, policymakers and academics who are leaders in their fields and influencers in our global economy.

In our fourth episode, Erin Xie, head of the Health Sciences team at BlackRock Fundamental Equities, talks to David Ricks, CEO of the pharmaceutical company Eli Lilly, about the future of health care. The two experts discuss how the COVID-19 pandemic may evolve, what innovative areas of health care can thrive as we move on from COVID, the thorny question of regulation and whether attractive valuations in the sector mean that now is the time to buy.

Erin and David, over to you.

[01:03] ERIN: Good morning, David. It's really exciting to have you joining us today as part of our expert2expert series, where we will talk about some of the current dynamics and opportunities in health-care sector.

DAVID: Great to be here with you. Thanks.

ERIN: As we enter into the third year of the COVID pandemic, what do you say some of the biggest impacts of COVID-19 to the health-care industries are?

[01:30] DAVID: I would say a few things. First, I think we've learned a lot about the strengths and weaknesses of the health-care system. Of course, on the service-delivery side, testing on a number of areas-- it's sort of surprising to many of us that we're still having conversations about flexibility and capacity.

And I think we've learned that the service delivery and other components of the health-care system are pretty rigid. And expanding capacity to the needs, in a time like this, have been difficult. We've probably also learned, especially in Western society, the real challenge of relying on public-health measures to contain infectious disease have real limitations in time and in scope, because I think there's new data out showing they had very little impact, actually, in the end.

[02:20] What did have an impact and what has worked, I think, is the response of the pharmaceutical industry. And I'm proud of that. I think we're here two years in, which is a very short time scale for development and discovery of new medicines and vaccines. And we have many vaccines. We have many medicines. Although, the variant evolution continues. The viral drift occurs. Actually, many of these solutions retain their effectiveness.

[02:48] Last year, from a vaccine perspective, our industry, mostly US and European companies, shipped 9 and 1/2 billion doses of vaccine. This year, it'll be over 15 billion. So there will be enough vaccine for the planet. And I think that's an astounding ramp-up, and really driven by a huge collaboration and urgency by the sector I think we really showed what we can do.

[03:11] ERIN: That's great to hear. I would definitely echo some of the points that you raised about public health. I think, in many areas of health care, we're still at the-- actually, below the pre-pandemic level. And so hopefully, when the pandemic normalizes, I think there's actually some pent-up demand in health care, in many areas.

[03:34] And I would also echo that I think this pandemic really made the world recognize the innovation power of the health-care industry, with the historic vaccines and tests as well as-- such as monoclonal antibody treatment that literally has developed-- and made the world really recognize the importance of health-care industry to the whole world and the whole economy.

So with that, may I pick your brain on your thoughts on how you think the COVID-19 will evolve?

Insert slide: Playing catch-up after COVID

[04:07] DAVID:  In the public-health measures are more or less exhausted and run their course. Many states in the US, European countries, are either passing policies or legislating the end of the public-health emergency. I think whether we like it or not, whether the virus is still a challenge or not, people are just tired of the situation.

[04:27] Also, the virus is migrating in a way viruses do. They become more infectious and less virulent. And that's what we're seeing here. Again, it's hard to guess how many more rounds we'll have. But at some point, it'll be a seasonal coronavirus that we'll talk about for the rest of our lives, but in a way like we do other circulating seasonal viruses.

[04:48] And as you mentioned, there's been undertreatment of many chronic diseases during the pandemic. And we have new medicines for those. But also, there's a catch-up in education and treatment rates that needs to occur. And that's an important part of our year this year as well.

[05:05] ERIN: Yeah, that's actually a great point. I feel like because COVID is such a center of the whole world for the past few years, we tend to forget that COVID is really only one area of health care. Actually, the health care is a much broader space than just COVID. So speak of that. Can you talk about, outside of COVID, what areas of innovations that you see are most exciting, what areas of R&D that Lilly has been focusing on investing?

[05:41] DAVID: Of course, diabetes and metabolic disorders is a big one. And our history is very strong there. Oncology, we've been in and out of.  We made a pretty big acquisition with Loxo Oncology and many others-- smaller ones since-- to build out a competitive, targeted oncology business. We've built, organically, an immunology business.  And also, we've been working forever on neurodegeneration and neuroscience and have had some breakthroughs.

[05:58] ERIN: That's great. Yeah, actually, I would echo you, from our perspective, some of the very exciting innovation in biopharma is also consistent with what you've talked about, such as cancer, immunology, and genetic diseases, for example. And as you mentioned, the neurodegenerative diseases-- we really hope to see some advancement. I think the science is actually moving a lot faster than a few years ago. So hopefully we see that materialize in the drug development.

[06:30] I'd also say that elsewhere in health care, besides biopharma, there's also tremendous innovation that we're seeing. For example, in med tech area, the minimally invasive surgical areas having a lot of innovation. And I think technology is also increasingly permeating in health care. Health care is probably one of the areas that has really the-- in terms of adoption of technology, probably the slowest area in adopting.

Insert slide: The regulation question

[07:00] Now, maybe shifting a little bit, we think, in terms of the policy side, it seems like policy risk is a forever topic in investors' mind. Do you think, given the contribution that the health-care industry has made for the world to really help control and manage the COVID, does the political position in the health-care industry, and particularly pharmaceutical industry, really improved? And is there any policy risk that you're concerned about?

[07:36] DAVID: Yeah, thanks for the question, Erin. And I agree. There's a lot of exciting innovation around health care as well, even beyond pharma. But pharma has this unique situation with this drug-pricing overhang. A lot of generalists worry about a binary event there that could change the math.

I think it's an interesting situation, because I began to travel outside the US. And in some economies, like in Europe and Japan, where we have good markets and do well but are already under pretty rigid government-pricing schemes, we make a good business. But it's not as good as the US.

[08:13] The tone has really shifted there in governments. And part of that is, they've seen what the US did, which was superior to both their domestic industries and their own health-care responses, in terms of procurement and co-development of vaccines and therapies during COVID.

[08:31] And the tone, to me, has shifted in those foreign capitals, from government, about the strategic nature of the industry. I think that, coupled with a growing concern about supply chain of health-care goods and services to begin with, but also pharmaceuticals and maybe an over-reliance on one or two economies-- people want to invest, and they want our investment. And the tone has shifted. Whether that leads to new policies or not, I don't know. But perhaps it delays bad policies further.

[09:04] Of course, we still have a kind of broken reimbursement system in the United States, where a minority of patients pay a lot for their medicines. And on average, people are paying almost 20% of the total bill for medicines in the United States health-care system. They pay 3% of the service bill. So insurance and government benefits provide the rest.

[09:27] So people have an overexposure, out of pocket, to what we do, even though you can make a good argument that drugs are the most efficient part of the health-care system. We ask patients to over subsidize them. So we need to get that corrected. And until we do, I think we will have this tension.

[09:44] That said, maybe, eventually, the politics will catch up to where the people are, and people can realize that we need a balance here. We need to preserve innovation incentives. And the US had a great response to COVID, not because solely the specifics around COVID, but for decades in advance, we built up a massive industrial infrastructure around antibody, small-molecule manufacturing, RNA therapeutics that were meant for other purposes.

[10:13] And that investment thesis was redirected to COVID.

[10:17] ERIN: Pretty much every conversation with our investors, the policy risk always comes up. So in my mind, it's very difficult to see any transformative policy will really occur, given all the complex stakeholders involved, as well as this current political environment. But in a way, if we do have some policy reform, I think even if the pharma industry will pay for some of that so we'll experience some financial impact, it could be a big lift in the political overhang and could be helpful.

Insert slide: Pharma on sale.

ERIN: Given what we've seen in the equity market as of late, the developmental-stage biotech space has definitely experienced a lot of pressure, and the valuation has come down quite significantly. What do you see the opportunities for M&A if this is development?

[10:48] DAVID: There's a long list of biotechs that have tried to go it alone on global development and commercialization, and it's a pretty mixed story, whereas I think, for them, as well, creating that-- taking that spark and turning it into potential medicine that can go to the clinic has created a lot more value for early-phase investors. So I think we think that's the place where trades should happen.

[11:13] But it's difficult to generalize, because within that, there are some subsegments of biotech that are really not down very much at all. In particular, I'd point to nucleic-acid therapies, gene therapy, although there's been viral-vector problems lately, et cetera. It's still a very hot space. Delivery systems for gene and RNA therapies are very hot. Unfortunately for us, those are areas we're deeply interested in more acquisitions and partnerships. So the price point hasn't really changed our math dramatically.

[11:47] ERIN: Well, this was great. Well, thank you so much, Dave. I really enjoyed the conversation, and I really appreciate you joining us and sharing your insights.

DAVID: Thanks for having me, Erin. It's an exciting time in the industry, and it's always good to talk to you and thank you.

[11:59] CARRIE: David and Erin covered a lot of ground, and I think we can all agree that the health care sector is an exciting area to watch. Thank you for tuning into our latest Expert to Expert video, and we hope you can join us for future episodes.

DISCLOSURE: This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of January 28, 2022, and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and nonproprietary sources deemed by BlackRock to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. Past performance is no guarantee of future results. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this material is at the sole discretion of the viewer/reader.

Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. It is not possible to invest directly in an index. Investing involves risks, including possible loss of principal. Concentrating investments in specific industries, sectors, markets or asset classes may underperform or be more volatile than other industries, sectors, markets or asset classes and than the general securities market. International investing involves additional risks including, but not limited to, those related to currency fluctuations, illiquidity and volatility. These risks may be heightened for investments in emerging markets.

This information should not be relied upon as research, investment advice, or a recommendation regarding any products, strategies, or any security in particular. This material is strictly for illustrative, educational, or informational purposes and is subject to change.

Prepared by BlackRock Investments, LLC.  Member FINRA.

© 2024 BlackRock, Inc. All rights reserved. BlackRock® is a registered trademark of BlackRock, Inc., or its subsidiaries in the United States and elsewhere. All other trademarks are those of their respective owners.

Expert to Expert

A BlackRock Fundamental Equities video series

Episode 4: Harnessing change in healthcare

Carrie King

Deputy CIO of Developed Markets,

BlackRock Fundamental Equities

Erin Xie

Head of Health Sciences,

BlackRock Fundamental Equities

David A. Ricks

Chair and CEO

Eli Lilly and Company

[00:10] CARRIE: Welcome to Expert to Expert, a BlackRock Fundamental Equities video series that pairs our investment pros with the business heads, politicians, policymakers and academics who are leaders in their fields and influencers in our global economy.

In our fourth episode, Erin Xie, head of the Health Sciences team at BlackRock Fundamental Equities, talks to David Ricks, CEO of the pharmaceutical company Eli Lilly, about the future of health care. The two experts discuss how the COVID-19 pandemic may evolve, what innovative areas of health care can thrive as we move on from COVID, the thorny question of regulation and whether attractive valuations in the sector mean that now is the time to buy.

Erin and David, over to you.

[01:03] ERIN: Good morning, David. It's really exciting to have you joining us today as part of our expert2expert series, where we will talk about some of the current dynamics and opportunities in health-care sector.

DAVID: Great to be here with you. Thanks.

ERIN: As we enter into the third year of the COVID pandemic, what do you say some of the biggest impacts of COVID-19 to the health-care industries are?

[01:30] DAVID: I would say a few things. First, I think we've learned a lot about the strengths and weaknesses of the health-care system. Of course, on the service-delivery side, testing on a number of areas-- it's sort of surprising to many of us that we're still having conversations about flexibility and capacity.

And I think we've learned that the service delivery and other components of the health-care system are pretty rigid. And expanding capacity to the needs, in a time like this, have been difficult. We've probably also learned, especially in Western society, the real challenge of relying on public-health measures to contain infectious disease have real limitations in time and in scope, because I think there's new data out showing they had very little impact, actually, in the end.

[02:20] What did have an impact and what has worked, I think, is the response of the pharmaceutical industry. And I'm proud of that. I think we're here two years in, which is a very short time scale for development and discovery of new medicines and vaccines. And we have many vaccines. We have many medicines. Although, the variant evolution continues. The viral drift occurs. Actually, many of these solutions retain their effectiveness.

[02:48] Last year, from a vaccine perspective, our industry, mostly US and European companies, shipped 9 and 1/2 billion doses of vaccine. This year, it'll be over 15 billion. So there will be enough vaccine for the planet. And I think that's an astounding ramp-up, and really driven by a huge collaboration and urgency by the sector I think we really showed what we can do.

[03:11] ERIN: That's great to hear. I would definitely echo some of the points that you raised about public health. I think, in many areas of health care, we're still at the-- actually, below the pre-pandemic level. And so hopefully, when the pandemic normalizes, I think there's actually some pent-up demand in health care, in many areas.

[03:34] And I would also echo that I think this pandemic really made the world recognize the innovation power of the health-care industry, with the historic vaccines and tests as well as-- such as monoclonal antibody treatment that literally has developed-- and made the world really recognize the importance of health-care industry to the whole world and the whole economy.

So with that, may I pick your brain on your thoughts on how you think the COVID-19 will evolve?

Insert slide: Playing catch-up after COVID

[04:07] DAVID:  In the public-health measures are more or less exhausted and run their course. Many states in the US, European countries, are either passing policies or legislating the end of the public-health emergency. I think whether we like it or not, whether the virus is still a challenge or not, people are just tired of the situation.

[04:27] Also, the virus is migrating in a way viruses do. They become more infectious and less virulent. And that's what we're seeing here. Again, it's hard to guess how many more rounds we'll have. But at some point, it'll be a seasonal coronavirus that we'll talk about for the rest of our lives, but in a way like we do other circulating seasonal viruses.

[04:48] And as you mentioned, there's been undertreatment of many chronic diseases during the pandemic. And we have new medicines for those. But also, there's a catch-up in education and treatment rates that needs to occur. And that's an important part of our year this year as well.

[05:05] ERIN: Yeah, that's actually a great point. I feel like because COVID is such a center of the whole world for the past few years, we tend to forget that COVID is really only one area of health care. Actually, the health care is a much broader space than just COVID. So speak of that. Can you talk about, outside of COVID, what areas of innovations that you see are most exciting, what areas of R&D that Lilly has been focusing on investing?

[05:41] DAVID: Of course, diabetes and metabolic disorders is a big one. And our history is very strong there. Oncology, we've been in and out of.  We made a pretty big acquisition with Loxo Oncology and many others-- smaller ones since-- to build out a competitive, targeted oncology business. We've built, organically, an immunology business.  And also, we've been working forever on neurodegeneration and neuroscience and have had some breakthroughs.

[05:58] ERIN: That's great. Yeah, actually, I would echo you, from our perspective, some of the very exciting innovation in biopharma is also consistent with what you've talked about, such as cancer, immunology, and genetic diseases, for example. And as you mentioned, the neurodegenerative diseases-- we really hope to see some advancement. I think the science is actually moving a lot faster than a few years ago. So hopefully we see that materialize in the drug development.

[06:30] I'd also say that elsewhere in health care, besides biopharma, there's also tremendous innovation that we're seeing. For example, in med tech area, the minimally invasive surgical areas having a lot of innovation. And I think technology is also increasingly permeating in health care. Health care is probably one of the areas that has really the-- in terms of adoption of technology, probably the slowest area in adopting.

Insert slide: The regulation question

[07:00] Now, maybe shifting a little bit, we think, in terms of the policy side, it seems like policy risk is a forever topic in investors' mind. Do you think, given the contribution that the health-care industry has made for the world to really help control and manage the COVID, does the political position in the health-care industry, and particularly pharmaceutical industry, really improved? And is there any policy risk that you're concerned about?

[07:36] DAVID: Yeah, thanks for the question, Erin. And I agree. There's a lot of exciting innovation around health care as well, even beyond pharma. But pharma has this unique situation with this drug-pricing overhang. A lot of generalists worry about a binary event there that could change the math.

I think it's an interesting situation, because I began to travel outside the US. And in some economies, like in Europe and Japan, where we have good markets and do well but are already under pretty rigid government-pricing schemes, we make a good business. But it's not as good as the US.

[08:13] The tone has really shifted there in governments. And part of that is, they've seen what the US did, which was superior to both their domestic industries and their own health-care responses, in terms of procurement and co-development of vaccines and therapies during COVID.

[08:31] And the tone, to me, has shifted in those foreign capitals, from government, about the strategic nature of the industry. I think that, coupled with a growing concern about supply chain of health-care goods and services to begin with, but also pharmaceuticals and maybe an over-reliance on one or two economies-- people want to invest, and they want our investment. And the tone has shifted. Whether that leads to new policies or not, I don't know. But perhaps it delays bad policies further.

[09:04] Of course, we still have a kind of broken reimbursement system in the United States, where a minority of patients pay a lot for their medicines. And on average, people are paying almost 20% of the total bill for medicines in the United States health-care system. They pay 3% of the service bill. So insurance and government benefits provide the rest.

[09:27] So people have an overexposure, out of pocket, to what we do, even though you can make a good argument that drugs are the most efficient part of the health-care system. We ask patients to over subsidize them. So we need to get that corrected. And until we do, I think we will have this tension.

[09:44] That said, maybe, eventually, the politics will catch up to where the people are, and people can realize that we need a balance here. We need to preserve innovation incentives. And the US had a great response to COVID, not because solely the specifics around COVID, but for decades in advance, we built up a massive industrial infrastructure around antibody, small-molecule manufacturing, RNA therapeutics that were meant for other purposes.

[10:13] And that investment thesis was redirected to COVID.

[10:17] ERIN: Pretty much every conversation with our investors, the policy risk always comes up. So in my mind, it's very difficult to see any transformative policy will really occur, given all the complex stakeholders involved, as well as this current political environment. But in a way, if we do have some policy reform, I think even if the pharma industry will pay for some of that so we'll experience some financial impact, it could be a big lift in the political overhang and could be helpful.

Insert slide: Pharma on sale.

ERIN: Given what we've seen in the equity market as of late, the developmental-stage biotech space has definitely experienced a lot of pressure, and the valuation has come down quite significantly. What do you see the opportunities for M&A if this is development?

[10:48] DAVID: There's a long list of biotechs that have tried to go it alone on global development and commercialization, and it's a pretty mixed story, whereas I think, for them, as well, creating that-- taking that spark and turning it into potential medicine that can go to the clinic has created a lot more value for early-phase investors. So I think we think that's the place where trades should happen.

[11:13] But it's difficult to generalize, because within that, there are some subsegments of biotech that are really not down very much at all. In particular, I'd point to nucleic-acid therapies, gene therapy, although there's been viral-vector problems lately, et cetera. It's still a very hot space. Delivery systems for gene and RNA therapies are very hot. Unfortunately for us, those are areas we're deeply interested in more acquisitions and partnerships. So the price point hasn't really changed our math dramatically.

[11:47] ERIN: Well, this was great. Well, thank you so much, Dave. I really enjoyed the conversation, and I really appreciate you joining us and sharing your insights.

DAVID: Thanks for having me, Erin. It's an exciting time in the industry, and it's always good to talk to you and thank you.

[11:59] CARRIE: David and Erin covered a lot of ground, and I think we can all agree that the health care sector is an exciting area to watch. Thank you for tuning into our latest Expert to Expert video, and we hope you can join us for future episodes.

DISCLOSURE: This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of January 28, 2022, and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and nonproprietary sources deemed by BlackRock to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. Past performance is no guarantee of future results. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this material is at the sole discretion of the viewer/reader.

Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. It is not possible to invest directly in an index. Investing involves risks, including possible loss of principal. Concentrating investments in specific industries, sectors, markets or asset classes may underperform or be more volatile than other industries, sectors, markets or asset classes and than the general securities market. International investing involves additional risks including, but not limited to, those related to currency fluctuations, illiquidity and volatility. These risks may be heightened for investments in emerging markets.

This information should not be relied upon as research, investment advice, or a recommendation regarding any products, strategies, or any security in particular. This material is strictly for illustrative, educational, or informational purposes and is subject to change.

Prepared by BlackRock Investments, LLC.  Member FINRA.

© 2024 BlackRock, Inc. All rights reserved. BlackRock® is a registered trademark of BlackRock, Inc., or its subsidiaries in the United States and elsewhere. All other trademarks are those of their respective owners.