BlackRock's Outlook: Anticipating Continued Growth in the Winning Themes of 2023

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Investing / Friday, 17 November 2023 10:02

"BlackRock's 2024 Outlook: AI, Healthcare, and Emerging Markets Poised for Growth"

BlackRock advises investors not to abandon successful themes from 2023, offering a glimpse into its 2024 thematic outlook. The asset management giant emphasizes key ideas that have thrived, notably artificial intelligence (AI) and healthcare, amid a market marked by divergence over the past 10 months.

Jay Jacobs, the U.S. head of thematics and active equity ETFs at BlackRock, highlights the excitement around AI, citing 2023 as a "year of training" for the technology. Looking ahead, Jacobs anticipates broader benefits, focusing on small and midcap pure-play AI names that are yet to experience significant returns. He suggests exploring semiconductor and networking stocks, emphasizing technological infrastructure development and new economies facilitated by AI.

BlackRock's thematic outlook also underscores healthcare as a promising area, particularly with breakthroughs in weight loss and Alzheimer's treatments. Jacobs foresees the mass commercialization of these drugs in 2024, driven by aging populations in the United States. While individual healthcare stocks like Eli Lilly and Novo Nordisk have soared, certain healthcare ETFs have faced challenges in 2023.

Emerging markets, especially those benefitting from supply chain reconfiguration, hold BlackRock's attention. Mexico and India are highlighted as potential growth areas, with investors currently having less than 1% exposure to these themes based on portfolio analysis. The iShares Mexico ETF (EWW) has shown strong performance, delivering a total return of 25% in 2023, while the iShares MSCI India ETF (INDA) has seen more modest returns.

As BlackRock anticipates catalysts for long-term themes in 2024, investors are urged to consider the continued potential of AI, healthcare, and emerging markets in the evolving investment landscape.

"In Conclusion: Navigating BlackRock's Insight for 2024"

BlackRock's 2024 thematic outlook provides investors with a roadmap for navigating the evolving investment landscape. The asset management giant advises against discarding successful themes from 2023, emphasizing the sustained potential of artificial intelligence (AI), healthcare, and emerging markets.

AI emerges as a focal point, with the anticipation that 2023 served as a "year of training" for the technology. BlackRock's Jay Jacobs envisions broader benefits ahead, directing attention to small and midcap pure-play AI names that may yield significant returns. The exploration extends to semiconductor and networking stocks, signaling opportunities in technological infrastructure development and emerging economies influenced by AI.

Healthcare, marked by breakthrough treatments, is poised for further development in 2024, with the mass commercialization of drugs expected as aging populations in the United States come into focus. While individual healthcare stocks have surged, challenges persist for certain healthcare ETFs in 2023.

BlackRock also casts a spotlight on emerging markets, especially those capitalizing on the "rewiring of supply chains." Mexico and India are singled out as potential growth areas, indicating that investors currently have minimal exposure to these themes.

As investors prepare for the coming year, BlackRock's insights serve as a guide, encouraging a strategic approach to themes that have already demonstrated success. The outlook underscores the importance of recognizing catalysts for long-term themes and remaining vigilant in a dynamic market environment.