MALE 1: There’s a lot of different competing forces in the markets today. On the one hand, you have, here in the US, a very strong labor market, you have consumers with very high levels of savings throughout the pandemic. And at the same time, you have concerns around inflation, driven by supply chain disruptions; you have still the Delta variant among us, and potentially other variants, still with us. Where do you see markets from now until the end of the year, and into 2022?

LARRY FINK: So what you described is a normal market: a lot of good things, a lot of bad things, a lot of volatility. But it doesn’t change the long term trends that—I do believe long term, markets are going to be higher.

FEMALE 1: After 18 months of pandemic related economic turmoil paired with concerns around slowing growth and a rising inflation, investors are looking to construct resilient portfolios to meet current and future challenges.

LARRY FINK: These are all things that we have to adapt and learn and grow and build, but we’re moving forward. And we’re moving forward in a positive way.

FEMALE 1: At the iShares Leaders Circle Conference, financial industry experts and thought leaders shared their views on the economy, sustainable investing and building portfolios equipped for this extraordinary time. Russ Koesterich echoed Larry Fink’s optimistic outlook, while also not losing sight of the risk.

RUSS KOESTERICH: The bottom line is the economy is in remarkably good shape; the economy is almost certainly going to decelerate. It’s decelerating from an unusually high level. It’s been a very long time since we’ve worried about inflation shocks, rate shocks. And it’s a challenge because the list of hedges is different, and arguably, there are fewer of them. So this is a big issue if you think about the composition of the portfolio.

FEMALE 1: Against this backdrop, institutional investors are focused on adapting their portfolios. The shift to adaptable and resilient portfolio construction is especially salient as investors consider a sustainable future.

MALE 2: While momentum behind sustainability is remarkable, it is still just the beginning of a long journey. It is estimated that $50 to $100 trillion dollars in capital investment is required to rebuild a Net-Zero global economy; one that emits no more greenhouse gases than it removes from the atmosphere by 2050. So with this in mind, the integration of sustainable solutions into portfolios is a journey and not a trend.

MALE 3: From BlackRock’s perspective, our focus on Net Zero is a function of our fiduciary responsibilities. We believe that climate risk will reshape the economy in the coming decades, regardless of whether it’s managed successfully or unsuccessfully.

FEMALE 1: Meanwhile, fixed income investors are adapting to the modernization of the bond market, the range of tools, including increasingly, ETFs.

MALE 4: One of the ways that we find ETFs have helped us is by allowing us to be much more precise in how we manage the credit exposure in our portfolios, in the portfolio construction process.

FEMALE 1: The benefits of ETFs can also make them well-suited for multi-asset portfolios.

MALE 5: We have 170+ capital market assumptions across, obviously, a region of asset classes. When you think about that in particular, you’re not always going to have access to every single vehicle, active managers. So what is clear from our perspective, is ETFs are really and efficient and effective way to get some of those exposures.

FEMALE 1: The speakers at the iShares Leaders Circle offered diverse viewpoints, objectives, and experiences, yet all agreed, portfolios need to be equipped to efficiently adapt, and ETFs have become essential to meeting these challenges.

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