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Jul 10, 2025
Charting Themes Across AI & Geopolitics
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Themes have played a significant role in the markets this year, with AI and geopolitics creating both opportunities and risks for investors.
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Our mid year thematic update looks at these two mega forces and explores what it could mean for your portfolio.
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Let's start with AI.
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The technology continues to improve, leading to smarter and more capable AI platforms.
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It's time to start thinking about what the implications of widespread AI adoption might look like.
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The power grid will need to evolve to keep up with growing power demand.
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The CapEx arms race will continue raging on between tech Titans seeking to win the category.
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And the shape of the workforce may evolve as AI drives the emergence of new technologies.
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Now turning to geopolitics, global fragmentation has several implications for investors.
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We're seeing regional tech rivalries emerge, a global infrastructure push to support reshoring, surging defense budgets, and central banks rethinking the role of the dollar.
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Together, these shifts are reshaping the global economy and maybe creating potentially powerful entry points for forward thinking investors.
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Check out our full outlook to explore the opportunities.
Carefully consider the Funds' investment objectives, risk factors, and charges and expenses before investing. This and other information can be found in the Funds' prospectuses or, if available, the summary prospectuses which may be obtained by visiting www.iShares.com or www.blackrock.com. Read the prospectus carefully before investing.
Investing involves risk, including possible loss of principal.
Funds that concentrate investments in specific industries, sectors, markets or asset classes may underperform or be more volatile than other industries, sectors, markets or asset classes and the general securities market.
AI technology relies on large data sets, which can lead to inaccuracies. Companies in AI face competition, rapid obsolescence, and depend on demand from various industries. Regulatory scrutiny could limit AI development, with data collection facing closer examination and potential fines. Country-specific regulations could also impact AI and big data companies.
This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of the date indicated and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and nonproprietary sources deemed by BlackRock to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by BlackRock, its officers, employees or agents. This material may contain 'forward-looking' information that is not purely historical in nature. Such information may include, among other things, projections and forecasts. There is no guarantee that any of these views will come to pass. Reliance upon information in this material is at the sole discretion of the viewer.
This material contains general information only and does not take into account an individual's financial circumstances. This information should not be relied upon as a primary basis for an investment decision. Rather, an assessment should be made as to whether the information is appropriate in individual circumstances and consideration should be given to talking to a financial professional before making an investment decision. This material does not constitute any specific legal, tax or accounting advice. Please consult with qualified professionals for this type of advice.
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AI and Geopolitics remain two of the most influential forces shaping global markets in 2025 and their momentum is accelerating. Our mid-year thematic update explores 10 key charts that illustrate what we’ve learned, what’s changed, and what the next-order implications of these powerful mega forces may be.
Themes like AI and geopolitics aren’t just dominating headlines – they’re reshaping the investment landscape. In an environment marked by slowing growth and tariff uncertainty, investors may consider using an active thematic rotation strategy – to dynamically shift exposure toward the most compelling themes, in an effort to capture evolving trends more effectively than traditional sector-based strategies. For example, as evidenced in the chart below, iShares U.S. Thematic Rotation Active ETF (THRO)’s approach in consumer exposures tilts toward companies that BlackRock believes may be more economically resilient and less exposed to tariff pressures. Blending select discretionary and staple companies, it seeks to capture shifting consumer behavior in a slower-growth, value-conscious environment.
Source: THRO's thematic basket refers to the iShares U.S. Thematic Rotation Active ETF (THRO)’s Consumer Overweight vs the S&P 500 index. BlackRock Systematic, as of May 2025. Sector returns calculated by BlackRock Systematic using data from BlackRock, MSCI Barra.THRO's exposures within consumer sectors that are overweight relative to the S&P 500 has been constructed using the systematic Theme identification framework outlined in the Fund prospectus. THRO's “Consumer overweight'” seek to capture exposure to companies BlackRock Systematic believes could outperform with a shift towards lower-cost, downstream consumer spending. For illustrative purposes only. Holdings subject to change. Performance data represents past performance and does not guarantee future results. Investment return and principal value will fluctuate with market conditions and may be lower or higher when you sell your shares. Current performance may differ from the performance shown. For standardized performance please visit THRO's product page
Chart description: Line chart showing the performance of the consumer overweights in THRO vs the consumer discretionary and consume staples sectors over the period ranging from January 2025 to April 2025. THRO’s consumer overweights at +12.36%, Consumer Staples Sector at +3.12% and Consumer Discretionary sector at -3.99%
AI is getting smarter and it’s leading to more adoption- our mid-year update covers what the implications of this adoption may look like, across energy infrastructure, the labor market, and more.
From a rise in global technology competition, to a changing of the defense spending landscape, our mid-year update explores this rapidly evolving space and the potential investment implications as the U.S. navigates a new era of government policies.
Explore My Hub, your new personalized dashboard, for portfolio tools, market insights, and practice resources.
Carefully consider the Funds' investment objectives, risk factors, and charges and expenses before investing. This and other information can be found in the Funds' prospectuses or, if available, the summary prospectuses which may be obtained by visiting www.iShares.com or www.blackrock.com. Read the prospectus carefully before investing. Investing involves risk, including loss of principal.
Investing involves risk, including possible loss of principal.
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.
The strategies discussed are strictly for illustrative and educational purposes and are not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. There is no guarantee that any strategies discussed will be effective. The information presented does not take into consideration commissions, tax implications, or other transactions costs, which may significantly affect the economic consequences of a given strategy or investment decision.
This material contains general information only and does not take into account an individual's financial circumstances. This information should not be relied upon as a primary basis for an investment decision. Rather, an assessment should be made as to whether the information is appropriate in individual circumstances and consideration should be given to talking to a financial professional before making an investment decision.
Funds that concentrate investments in specific industries, sectors, markets or asset classes may underperform or be more volatile than other industries, sectors, markets or asset classes and the general securities market.
Technology companies may be subject to severe competition and product obsolescence. Technologies perceived to displace older technologies or create new markets may not in fact do so. Companies that initially develop a novel technology may not be able to capitalize on the technology. AI technology relies on large data sets, which can lead to inaccuracies. Companies in AI face competition, rapid obsolescence, and depend on demand from various industries. Regulatory scrutiny could limit AI development, with data collection facing closer examination and potential fines. Country-specific regulations could also impact AI and big data companies.
International investing involves risks, including risks related to foreign currency, limited liquidity, less government regulation and the possibility of substantial volatility due to adverse political, economic or other developments. These risks often are heightened for investments in emerging/developing markets or in concentrations of single countries.
Actively managed funds do not seek to replicate the performance of a specified index, may have higher portfolio turnover, and may charge higher fees than index funds due to increased trading and research expenses.
A Fund's use of derivatives may reduce the Fund's returns and/or increase volatility and subject the Fund to counterparty risk, which is the risk that the other party in the transaction will not fulfill its contractual obligation. The Fund could suffer losses related to its derivative positions because of a possible lack of liquidity in the secondary market and as a result of unanticipated market movements, which losses are potentially unlimited. There can be no assurance that a Fund's hedging transactions will be effective.
Securities issued in IPOs have no trading history, and information about the companies may be available for very limited periods. In addition, the prices of securities sold in IPOs may be highly volatile or may decline shortly after the IPO. Small-capitalization companies may be less stable and more susceptible to adverse developments, and their securities may be more volatile and less liquid than larger capitalization companies.
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iShares Bitcoin Trust ETF (IBIT): Investing involves a high degree of risk, including possible loss of principal. An investment in the Trust is not suitable for all investors, may be deemed speculative and is not intended as a complete investment program. An investment in Shares should be considered only by persons who can bear the risk of total loss associated with an investment in the Trust.
Investing in digital assets involves significant risks due to their extreme price volatility and the potential for loss, theft, or compromise of private keys. The value of the shares is closely tied to acceptance, industry developments, and governance changes, making them susceptible to market sentiment. Digital assets represent a new and rapidly evolving industry, and the value of the Shares depends on their acceptance. Changes in the governance of a digital asset network may not receive sufficient support from users and miners, which may negatively affect that digital asset network’s ability to grow and respond to challenges Investing in the Trust comes with risks that could impact the Trust's share value, including large-scale sales by major investors, security threats like breaches and hacking, negative sentiment among speculators, and competition from central bank digital currencies and financial initiatives using blockchain technology. A disruption of the internet or a digital asset network would affect the ability to transfer digital assets and, consequently, would impact their value. There can be no assurance that security procedures designed to protect the Trust’s assets will actually work as designed or prove to be successful in safeguarding the Trust’s assets against all possible sources of theft, loss or damage.
iShares Gold Trust (IAU): Following an investment in shares of the Trust, several factors may have the effect of causing a decline in the prices of gold and a corresponding decline in the price of the shares. Among them: (i) Large sales by the official sector. A significant portion of the aggregate world gold holdings is owned by governments, central banks and related institutions. If one or more of these institutions decides to sell in amounts large enough to cause a decline in world gold prices, the price of the shares will be adversely affected. (ii) A significant increase in gold hedging activity by gold producers. Should there be an increase in the level of hedge activity of gold producing companies, it could cause a decline in world gold prices, adversely affecting the price of the shares. (iii) A significant change in the attitude of speculators and investors towards gold. Should the speculative community take a negative view towards gold, it could cause a decline in world gold prices, negatively impacting the price of the shares.
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