Model Portfolio
Performance and positioning update:
- February highlighted the increasingly multi-directional nature of the current market environment, with debate around AI spending and its broader implications driving meaningful volatility within software and growth-oriented stocks. Trade policy uncertainty intensified after the Supreme Court ruled unfavorably on the administration’s existing tariff framework, prompting a pivot toward a revised structure as a short-term fix. At the same time, escalating tensions in the Middle East culminated in a late-month U.S. and Israeli strike on Iranian targets, further contributing to market swings.
- Overall, markets reinforced the importance of diversification and selectivity this month as the broad U.S. equity market declined (S&P 500 -0.76%), weighed down by a selloff in U.S. growth stocks & cyclicals. Meanwhile, investors sought opportunities within less richly valued sectors and regions across the globe, including dividend stocks (MSCI World High Dividend Index up +5.25%) and emerging market equities (MSCI EM Index up +5.50%).
- Fixed income returns were generally positive, albeit to a lesser extent. The Bloomberg U.S. Agg rose +1.64%, led by longer-duration Treasuries and investment grade corporate bonds. Meanwhile, U.S. high yield corporates were roughly flat. Bank loans (as measured by the Morningstar LSTA US LL Index) fell -0.78% on the month given the loan market’s outsized exposure to the software sector.
Source: BlackRock as of 2/28/2026. All index data for market commentary sourced from Bloomberg as of 2/28/2026. Index performance is for illustrative purposes only. Index performance does not reflect any management fees or expenses. Indexes are unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results. US Dividend Stocks: MSCI USA High Dividend Index. Int’l Dividend Stocks: MSCI World ex USA High Dividend Yield Index. Global REITs: FTSE EPRA Nareit Developed Index. Global Infra. Equity: S&P Global Infrastructure Index. EM Debt: JPM EMBI Global Index. US IG Bonds: Bloomberg US Corp Bond. High Yield Bonds: Bloomberg US HY 2% Issuer Cap Index. Preferreds: S&P Preferred Stock Index. US Treasuries: Bloomberg US Treasury (1972) Index. Global Developed Equity: MSCI World Index. EM Equity: MSCI Emerging Market Index. US T-Bills represented by the Bloomberg US Treasury Bills Index .This material represents an assessment of the market environment as of the date indicated; is subject to change; and is not intended to be a forecast of future events or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice regarding the funds or any issuer or security in particular. A basis point represents one hundredth of a percent.
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Justin Christofel
Global head of Income Investing, Multi-Asset Strategies & Solutions
Justin Christofel, CFA, CAIA, Managing Director, is global head of Income Investing for BlackRock’s Multi-Asset Strategies & Solutions group. He is a portfolio manager for a number of income strategies including the Multi-Asset Income Fund, Dynamic High Income Fund, Managed Income Fund, and Multi-Asset Income model portfolios.
Louis Arranz
Portfolio manager, Multi-Asset Strategies and Solutions (MASS) Income team
Louis Arranz, CFA, CAIA, FRM, Director, is a portfolio manager for BlackRock’s Multi-Asset Strategies & Solutions (MASS) Income team where he focuses on investment research and portfolio management.
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