BlackRock is deeply steering its $185 billion worth of model portfolio into US stocks and artificial intelligence. The decision was made this week with asset managers adjusting the entire model suite, increasing stock allocations and dumping exposure to international developed markets.
The company currently houses 2% overweight in its stock.
This was not a slow shuffle. Billions of people ran through multiple ETFs on Tuesday as BlackRock carried out a reorganization. The iShares S&P 100 ETF (OEF) alone brought in $3.4 billion.
The Islands Core S&P 500 ETF (IVV) raised $2.3 billion, while the Islands US Equity Factor Rotation Active ETF (DYNF) added nearly $2 billion.
Rebalancing has caused rapid influx and outflows that reorganize investor exposure behind performance data and macroeconomic outlook.
BlackRock raises strong US revenue stocks
The model update comes as BlackRock supports American stock gatherings, backed by strong revenue and optimism about interest rate reductions. In an investment letter obtained by Bloomberg, the company said that US companies had achieved revenue growth of 11% since the third quarter of 2024.
Meanwhile, revenue in other developed markets barely touched 2%. That gap helped push the decision to drop international holdings in favor of Americans.
Michael Gates, Lead Portfolio Manager for BlackRock’s Target Arlocation ETF Model Portfolio Suite, said the US market is the only one showing consistency in analyst forecast sales growth, profit delivery and revisions.
“The US stock market continues to be respectable on its own in terms of revenue delivery, sales growth and sustainable trends in analyst estimates and revisions,” Michael wrote. He added that the developed markets outside the US are far behind, especially when it comes to sales.
This week’s changes reflect that position. The move came ahead of the expected Federal Reserve cuts in interest rates.
The S&P 500 is already sitting at its highest ever, with artificial intelligence driving momentum and investors preparing for a cheaper money environment.
BlackRock’s REWEITING will match the model to these expectations, using updated data to withdraw money from low-performing regions and place it where growth appears to be more sustainable.
Such model portfolios are built for financial advisors who want pre-packaged asset allocations. When BlackRock updates its quota, multiple funds will shake up the flow. The model grew quickly. Earlier this year, they managed $150 billion. Now, that number is $185 billion.
The BlackRock model team is also “leaning” into AI buildouts, and according to commentary, it has shifted from providing AI-centric funds with wide range of US tech ETF exposure. Nearly $1.4 billion flowed into the iShares AI Innovation and Tech Active ETF (BAI) on Tuesday, but the Ishares US Technology ETF (IYW) lost $2.7 billion.
“We see AI as both a defensive hedge and a growth catalyst,” writes Michael.
All ETFs involved in the shift reflect some of the broader decisions. The Islands Core S&P 500 ETF took in more than $2 billion as money moved into a big cap. The factor rotation also won nearly $2 billion, indicating that BlackRock not only buys the index, but is actively betting on changes in sectors within US stocks.
