BlackRock has raised equities to overweight for 2021, based on its view that the restart of the economy will accelerate with the distribution of vaccines.
The firm is raising equities from neutral on a tactical basis, meaning over a six-to-12-month basis. From a long-term strategic view, BlackRock remains neutral on stocks, due to valuations and a challenging environment for earnings and dividend payouts. The S&P 500 has traded to new highs and risen more than 14% this year, even after the big selloff in March.
“The big change around the outlook itself is upgrading risk assets overall and seeing 2021 as a very constructive year for risk assets,” said Mike Pyle, BlackRock’s global chief investment strategist. BlackRock released its 2021 outlook Monday.
Pyle said BlackRock has cut investment grade credit to underweight, on a tactical basis, and prefers high yield debt for income potential. The firm also upgraded emerging market debt to neutral and Asian fixed income to overweight.
“We see 2021 as a really powerful year for the restart, in terms of economic activity, but also importantly a year where we’re going to see central banks hold interest rates within a pretty tight range,” Pyle said.
Pyle said the firm remains focused on the stocks of quality companies, particularly in the U.S. The firm’s strategists favor companies that will