THIS VIDEO IS MARKETING MATERIAL
Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.
Welcome to our winter outlook. I’m Karim, from iShares, and in this video, I’m going to outline our latest investment views.
Updates to our investment outlook are underpinned by two key principles. Firstly, investing is all about the long term, so we try to identify opportunities that we think can stand the test of time. Secondly, however, we need to stay alert to opportunities and risks that might develop, and adapt our outlook accordingly.
So our first theme remains centred on the US and the relative strength of its economy and stock market. In our last update, we noted that US corporate earnings growth had started to broaden out after largely being driven by early AI winners over the past couple of years. This trend has gathered pace and we therefore see opportunity in equal-weight US stock market exposures like the S&P 500 equal weight index, where each company has the same weight and investors can therefore gain greater exposure to companies and sectors outside of the tech giants that tend to dominate the standard S&P 500.
Our second theme is also an evolution of an existing story, about the opportunity in bonds. Central banks such as the Bank of England started cutting interest rates in 2024, but they didn’t cut as far or as fast as many investors had been expecting, largely due to certain components of inflation staying pretty sticky. That means investors can still earn attractive levels of interest from bonds issued by developed market governments, such as UK gilts, which also tend to be relatively low risk, because these governments usually have a good track record of repaying interest when it’s due and repaying the value of the bond when it matures.
We introduce another element to our bond view, which is ‘duration’. The greater the length of time until a bond matures, the longer its duration, and the higher the uncertainty around interest rates, economic growth and various other factors that could impact the value of the bond. Therefore, investors tend to view long duration bonds as higher risk than short duration bonds, and they usually demand a higher interest rate, or ‘yield’, for taking on this additional risk. However, the difference in yield between short duration and long duration gilts is currently quite small, making short duration gilts relatively attractive for investors seeking income with minimal risk.
Finally, we look to take advantage of developing trends, in particular AI, and the companies that could be set to benefit from the next stage of its evolution. While we still see potential for the companies involved in what we call the build-out of AI – that is, the companies developing semiconductors, data centres, AI models and the power systems that support them – we also look ahead to the adoption phase, and the companies that could benefit from using AI to potentially improve efficiency, lower costs, increase revenues and grow profit margins.
For more on these themes and our latest investment ideas, check out our latest outlook.
This video is marketing material. Before investing please read the Prospectus and the PRIIPs KID available on www.ishares.com/it, which contain a summary of investors’ rights.
Risk Warnings
Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.
Past performance is not a reliable indicator of current or future results and should not be the sole factor of consideration when selecting a product or strategy.
Changes in the rates of exchange between currencies may cause the value of investments to diminish or increase. Fluctuation may be particularly marked in the case of a higher volatility fund and the value of an investment may fall suddenly and substantially. Levels and basis of taxation may change from time to time and depend on personal individual circumstances.
Regulatory Information
In the UK and Non-European Economic Area (EEA) countries: this is issued by BlackRock Advisors (UK) Limited, which is authorised and regulated by the Financial Conduct Authority. Registered office: 12 Throgmorton Avenue, London, EC2N 2DL, Tel: +44 (0)20 7743 3000. Registered in England and Wales No. 00796793. For your protection, calls are usually recorded. Please refer to the Financial Conduct Authority website for a list of authorised activities conducted by BlackRock.
In the European Economic Area (EEA): this is issued by BlackRock (Netherlands) B.V. is authorised and regulated by the Netherlands Authority for the Financial Markets. Registered office Amstelplein 1, 1096 HA, Amsterdam, Tel: 020 – 549 5200, Tel: 31-20-549-5200. Trade Register No. 17068311 For your protection telephone calls are usually recorded.
In Israel: this is issued by BlackRock Investment Management (UK) Limited, authorised and regulated by the Financial Conduct Authority. Registered office: 12 Throgmorton Avenue, London, EC2N 2DL. Tel: + 44 (0)20 7743 3000. Registered in England and Wales No. 02020394. For your protection telephone calls are usually recorded. Please refer to the Financial Conduct Authority website for a list of authorised activities conducted by BlackRock.
In Italy: For information on investor rights and how to raise complaints please go to https://www.blackrock.com/corporate/compliance/investor-right available in Italian.
For investors in Israel
BlackRock Investment Management (UK) Limited is not licenced under Israel’s Regulation of Investment Advice, Investment Marketing and Portfolio Management Law, 5755-1995 (the “Advice Law”), nor does it carry insurance thereunder.
For investors in South Africa
Please be advised that BlackRock Investment Management (UK) Limited is an authorised Financial Services provider with the South African Financial Services Conduct Authority, FSP No. 43288.
Any research in this video has been procured and may have been acted on by BlackRock for its own purpose. The results of such research are being made available only incidentally. The views expressed do not constitute investment or any other advice and are subject to change. They do not necessarily reflect the views of any company in the BlackRock Group or any part thereof and no assurances are made as to their accuracy.
This document is for information purposes only and does not constitute an offer or invitation to anyone to invest in any BlackRock funds and has not been prepared in connection with any such offer.
© 2025 BlackRock, Inc. All Rights reserved. BLACKROCK, BLACKROCK SOLUTIONS and iSHARES are trademarks of BlackRock, Inc. or its affiliates. All other trademarks are those of their respective owners.