iSHARES 2023 YEAR-AHEAD INVESTOR GUIDE​

In this institutional investor guide, we pair our macroeconomic views and market positioning insights to identify potential investment opportunities using exchange traded funds (ETFs).

THE BIG PICTURE

We consider fund flow trends and proprietary signals designed to capture crowded positioning and under-owned opportunities within each investment theme:

  • Rethinking the role of bonds: Recession is almost a certainty, but high and persistent inflation implies Federal Reserve easing is unlikely in 2023. Investors should consider adding high-quality fixed income to their portfolio at current yield levels.
  • Pricing the damage: A higher real-rate regime tends to favor value-style equities, a departure from a decade of growth leadership. For those willing to step out in equity risk, small-caps may present attractive risk on fundamentals at favorable valuations.
  • Living with inflation: Core inflation is unlikely to get back to pre-pandemic levels of below 2% in 2023. TIPS and infrastructure equities are historically attractive in a higher inflationary regime.

EXPLORE KEY FINDINGS

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BONDS ARE BACK

The rapid shift higher in yields has created significant opportunities in high-quality, front-end fixed income exposures, with front-end U.S. Treasury adding $10.6 billion in net assets year-to-date1

TACTICAL POSITIONING

A higher real-rate regime favors value-style equities, a departure from a decade of growth leadership. For those willing to step out in equity risk, small-caps may present attractive risk on fundamentals at favorable valuations.

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INFLATION LIKELY TO REMAIN ELEVATED

Core inflation is unlikely to get back to pre-pandemic levels of below 2% in 2023. Given our view of higher inflation and stable rates in the months ahead, allocation to TIPS can be a hedge against inflation and a ballast to equities in a portfolio.

1BlackRock, Bloomberg, Markit. ETF groupings determined by BlackRock, Markit. ‘Year-to-date’ reference period between January 01, 2022, through November 11, 2022. Data as of November 11, 2022

MAXIMIZE PORTFOLIO & TRADING EFFICIENCY WITH INSTRUCTIONAL TOOLS

BlackRock offers a suite of complimentary tools & analytics built for institutional investors to help with portfolio construction, vehicle selection and ETF trading. Looking under the hood with the iShares Product Consulting team can help you determine which value or small cap exposure could be right for your specific market outlook. Please reach out to iShares Portfolio Consulting to learn more.​

Gargi Pal Chaudhuri

Gargi Pal Chaudhuri

Head of iShares Investment Strategy and Markets Coverage