BlackRock, the world’s largest asset management firm, has downgraded its investment rating for emerging market (EM) stocks, including South Korea, by one notch due to artificial intelligence (AI) risks.<\/p>\n
In its global investment outlook report for the second half of 2026, published on the 30th of last month, BlackRock Investment Research announced that it was lowering its investment rating for emerging market stocks from “overweight” to “neutral” for the next six to twelve months. As the reason, it pointed to the risks associated with markets like South Korea and Taiwan, where AI-related companies account for a large proportion.<\/p>\n
The report stated, “When multiple markets are connected to the same supply chain, geographical diversification does not reduce concentration risk,” adding, “Due to this concentration risk, we have downgraded our investment rating for emerging market equities in general.”<\/p>\n
The firm viewed the structure of these countries’ stock markets\u2014led by Samsung Electronics and SK Hynix in Korea, and TSMC in Taiwan\u2014as being concentrated on a small number of large-cap AI-related stocks, as potentially amplifying risk. However, BlackRock maintained an “overweight” rating for the U.S. stock market, which has a high proportion of technology companies.<\/p>\n
The report assessed, “We are seeking broad AI investment opportunities through U.S. tech stocks, and accordingly, we maintain an overweight rating on U.S. stocks,” noting, “While it is unclear which companies will ultimately emerge as winners, it is highly likely that many of them will be located in the United States.” Regarding long-term U.S. Treasuries, the firm maintained an “underweight” rating.<\/p>\n
It viewed the role of U.S. Treasuries as a haven asset as inflation has been triggered by massive investments in AI infrastructure. Subsequently, the investment rating for short- and medium-term Eurozone government bonds was upgraded from neutral to overweight.<\/p>\n
At the same time, it was analyzed that investors are overestimating the duration of monetary policy tightening. Jean Boisbin, Director of BlackRock Investment Research, stated in an interview with Bloomberg, “Due to the disruptive changes brought about by AI, polarization among companies in the corporate bond market will intensify; consequently, ‘selective investment’ that identifies high-quality firms will be necessary to generate excess returns above the market average.”<\/p>\n","protected":false},"excerpt":{"rendered":"