Navigator: New terrain

Markets are noisy, but opportunity remains. Focus on three things: Growth, Income and Diversification. Geopolitics and the energy supply shock are driving volatility. You need to be more selective in finding growth in portfolios. Start with geography. The U.S. has solid domestic demand and energy independence. AI-led productivity is also lifting earnings. There's now a wider gap between winners and losers in the equity market, setting the stage for great alpha opportunities. In Asia, energy prices are driving inflation and currency swings, putting policy makers in a tough position. We like the sweet spots of the AI supply chain and beneficiaries of energy security. Lean into these themes and active strategies that can ride through the waves. Stay invested but be intentional. And while you’re staying invested, you can get paid to wait. Income helps in choppy markets. In a supply-shock environment, look beyond yield and think about managing risk and choosing resilient sources. That’s why we’re cautious on long-dated bonds and prefer the middle of the curve – earning income without letting duration drive risk. And don’t overlook Asia: where you can often find shorter-dated credit and higher-quality income, with added diversification. Income isn’t just bonds – volatility can create opportunities through options-based and equity income approaches - helping you stay invested while managing downside risk. Build income deliberately, instead of just chasing yield. Because in markets like these, you don’t just want returns, you want resilience. Portfolios are being stress-tested again. When inflation pressure and supply shocks hit, traditional macro relationships can be less reliable. That doesn’t reduce the need for diversification, but it does change how you approach it. As investors reassess policy credibility and long-term inflation risk, look for resilience from assets that may behave differently under stress: inflation-linked bonds to help protect purchasing power; liquid alternatives less tied to market direction; and real assets such as gold. Diversification helps you stay invested with confidence. Today it needs truly distinct drivers – so your portfolio is ready for what comes next. Important Information This material is provided for educational purposes only and 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 iShares Funds, nor to adopt any investment strategy. The opinions expressed are subject to change. References to specific securities, asset classes and financial markets are for illustrative purposes only and are not intended to be and should not be interpreted as recommendations. 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