BlackRock entered 2026 with a clear investment plan built on three pillars: artificial intelligence, income and diversification.
Jay Jacobs, head of equity exchange-traded funds at BlackRock, explained how ETFs fit into the changing market bets of the world’s largest asset manager, which oversees more than $13 trillion of investors. Investors should continue to focus on growth, he says, but precision will be more important than broad exposure.
“The first is really what are the biggest growth opportunities in the market today,” Jacobs said on CNBC’s “ETF Edge” on Monday. “You have to focus the laser to find some of these targeted exposures, like artificial intelligence, that could work very well in this environment.”
This and the other investment themes Jacobs shared on “ETF Edge” are consistent with BlackRock’s 2026 Annual Outlook “AI, Income & Diversifiers,” released earlier this week.
BlackRock continues to view AI as a long-term, capital-intensive investment cycle. Infrastructure spending remains high, while productivity improvements and profit growth are supported by AI-related investments. The company does not see the issue as being close to exhaustion.
BlackRock is among the ETF firms offering AI-focused funds, such as its iShares AI Innovation and Tech Active ETF (BAI), who has amassed a fortune of over $8 billion.
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There are many other AI ETF options that have grown to over $1 billion in assets in recent years:
- Roundhill Generative AI & Technology ETF (CHAT)
- Ark Autonomous Technology and Robotics ETF (ARQ)
- Global X Robotics and Artificial Intelligence ETF (CLEANING)
- Global X Artificial Intelligence and Technology ETF (AIQ)
- iShares Future AI & Tech ETF (ARTY)
- Dan Ives Wedbush AI Revolution ETF (IVES)
Jacobs cited the high concentration of the U.S. stock market, with a handful of mega-cap tech stocks now accounting for an outsized share of returns, as one of the reasons for fine-tuning equity exposure. The “Magnificent Seven” stocks make up over 40% of the shares S&P 500 Index.
“[That concentration] is either a feature or a bug,” Jacobs said. “It’s reaching historic proportions.”
Jacobs said investors are responding by being more intentional about how much focus they want. Some choose to broaden their exposure by equal weighting the US stock market to manage risk.
Jacobs cited the interest rate environment and expectations that the Federal Reserve will cut rates again as a reason to focus on earnings this year as falling rates put pressure on investment returns. Investors who have relied on the money markets for income may need to reposition themselves. “We’re in a falling interest rate environment. We expect some interest rate cuts this year. We need to find new revenue streams to diversify your portfolio and generate income from it,” Jacobs said.
Diversification is the third pillar of BlackRock’s market approach for 2026. Bouts of volatility become increasingly common when market leadership is in short supply, and traditional portfolio designs that rely on bonds to offset the risks of stocks – typically the so-called 60-40 portfolio – prove less reliable during periods of stress. As a result, investors are looking for assets that behave differently, according to Jacobs. “Where can you really diversify your portfolio?” he said. “Something that will behave differently than stocks and bonds.”
Jacobs’ underlying message was that investors have been very lucky over the past decade as the US stock market has delivered significant returns. However, it would be risky to expect this recovery to continue at a similar pace. “Over the last decade, the S&P 500 returned 13.5% annually, and many expect that to be lower,” he said.