BlackRock, the world’s largest asset manager, is advising investors to diversify away from the US market. According to Ben Powell, BlackRock’s chief for the Middle East and Asia-Pacific, relying too heavily on US investments is becoming increasingly risky.
Diversification is Key
Powell, in a recent interview, cited a weakening dollar and trade tensions as reasons for concern about the US market. He emphasized the importance of diversification, stating that “having all your eggs in one basket, even a beautiful basket like the US, feels a bit riskier.”
India: A Rising Star
BlackRock is particularly bullish on emerging markets, especially India. Powell highlighted India’s strong labor force growth, technological advancements, growing geopolitical importance, and positive demographic trends as key factors driving its potential to outperform the US.
He stated, “We like India. We think India is on the right side of many significant global shifts. Its size and economic strength make it a globally attractive partner. India’s GDP is poised to surpass Japan’s soon, and the technological progress in India in recent years is often underestimated.”
US Market Still Strong, But…
While advocating for diversification, Powell acknowledged that BlackRock still holds a significant amount of US equities. He also pointed out that the potential of artificial intelligence (AI) could significantly boost the US market, counteracting some of the existing concerns. However, the overall message is clear: diversification is crucial in the current economic climate.
