Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.
Key points
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01
Healthy earnings, but selectivity key
We expect earnings to expand globally and support equities – but see some areas of the market lagging behind.
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02
Mega forces drive sector dispersion
Vast spending is driving economic growth and transforming the corporate landscape, leading to wide dispersion within sectors.
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03
Global bargains?
Many companies outside the U.S. have world-leading businesses with global operations – yet trade at a discount to U.S. peers.1
Will 2025 be another positive year for equities?
At BlackRock Fundamental Equities, we see a supportive environment for equity markets as we head into 2025. Inflation is likely to remain under control in most major economies, in our view, allowing central banks to cut interest rates further. At the same time, global economic growth is forecast to be around 3% a year over the next couple of years, according to the IMF. This environment could allow a broad set of companies to boost earnings and maintain elevated profit margins.
Dispersion between and within sectors
The figures shown relate to past performance. Past performance is not a reliable indicator of current or future results. Index performance returns do not reflect any management fees, transaction costs or expenses. Indices are unmanaged and one cannot invest directly in an index. Source: Fundamental Equities, with data from Bloomberg, Oct. 31, 2024.
The auto sector may remain weak due to the tricky EV transition, but we expect housing and construction to pick up in 2025.
Valuations for the most obvious beneficiaries of structural change are high, and so we look for the next wave of winners within AI, the energy transition and other mega forces.
Geopolitical concerns can lead to regional discounts for companies with solid fundamentals. See the chart for one example of how sentiment can impact a region.
We see opportunities in parts of emerging markets that may benefit from the relocation of supply chains after the pandemic, and Japanese stocks that are set to receive a boost from corporate reform.
Source:
1Bloomberg data, December 2025
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Risk warnings
Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.
Past performance is not a reliable indicator of current or future results and should not be the sole factor of consideration when selecting a product or strategy.
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