BlackRock Model Portfolios

Hi, I’m Uwe Helmes, Lead Strategist for the Model Portfolio Solutions business here in Australia.

As we approach financial year end, I wanted to take a moment to reflect on how markets have evolved, share a brief outlook, and talk through how our portfolios are currently positioned to capture opportunities ahead.

It’s been a very eventful year. We’ve seen major headline‑grabbing events — from the signing of the Big Beautiful Bill in the US, to tech bubble concerns late last year, snap elections in Japan, and more recently, the conflict in the Middle East.

Closer to home, we’ve seen a significant shift from the Reserve Bank of Australia — reversing its short easing cycle in 2025 and hiking rates three times so far in 2026.

We’ve also witnessed the release of the Australian Federal Budget, with proposed reforms to capital gains tax and negative gearing, which are still working their way through parliament.

It’s fair to say there’s been no shortage of negative headlines, uncertainty, and debate around economic growth and inflation.

Despite all the noise, most equity markets are up over the past 12 months and close to all‑time highs.

That said, there’s a lot happening beneath the surface. We’re seeing sharp swings, meaningful rotations within and across markets, and much higher dispersion. All of this creates both risks and opportunities.

It’s exactly the kind of environment where we believe a disciplined, risk‑aware investment approach really matters.

And that’s reflected in performance. Over the past year, the iShares Enhanced Strategic portfolios have delivered top quartile returns — ranging from +6% for the Conservative profile to +17% for the Aggressive profile, as at 19^th June 2026.

A few of the key calls that drove this outperformance include:

• preferring equities over fixed income

• favouring US over Australian equities

• tilting towards Emerging Markets over Developed Markets

• and maintaining an allocation to gold over bonds

Importantly, our data‑driven process has also helped during periods of market stress.

For example, during the energy shock earlier this year, our insights pointed to staying invested — while managing risk — rather than reacting to the noise and missing the rebound that followed.

The ability to stay disciplined, but also remain nimble, has been central to how we’ve delivered superior client outcomes over the past 11 years since inception.

While we’re pleased with the strong track record, markets continue to evolve — so we recently rebalanced the portfolios on the 23rd of June to reflect our latest tactical views.

Let me briefly run through some of the key changes.

First, we locked in gains and reduced the equity overweight. While we remain constructive on the outlook, we believe it’s prudent to take some chips off the table.

Second, we’re still leaning into the AI theme — but in a more targeted way. We continue to favour US equities for exposure to hyperscalers and key AI beneficiaries, and we’ve also added the iShares Asia 50 ETF to access other parts of the value chain, particularly semiconductors and hardware.

Third, from a regional perspective, we continue to prefer Emerging Markets and the US over Australia and Europe, supported by stronger earnings growth.

On the defensive side, we increased the allocation to cash to take advantage of higher short‑end yields, while maintaining flexibility to deploy capital as opportunities arise.

Within bonds, we continue to favour higher‑quality government bonds over riskier areas like high yield and emerging market debt.

Overall, it’s about staying balanced, managing risk, and being able to capture emerging opportunities.

Thanks for watching.