Blackrock Institute released an article stating that based on the strong profit momentum driven by AI, the institution strategically increased its allocation to developed market equities. Blackrock Institute reduced its allocation to high-yield bonds to neutral, as it is more inclined to capture growth opportunities through stocks, but high-yield bonds still have value in income allocation within fixed income assets. Currently, the AI-driven profit momentum remains strong: in the past two quarters, the upward revision of earnings expectations for the MSCI USA Index for 2026 and 2027 ranks among the top five since 1988. And this trend is gradually spreading: the gap between earnings growth expectations for the "seven giants of the US stock market" in 2027 and the overall S&P 500 Index has narrowed to 3%, significantly lower than 31% in 2024. As AI's impact on the market crosses traditional asset class boundaries, market forces are also expanding between different regions and industries. The proportion of the technology sector in the MSCI Emerging Markets Index is now higher than its proportion in the S&P 500 Index, reflecting the key role of China, Taiwan, and South Korea in the AI supply chain. These situations support Blackrock Institute's view of increasing the allocation to developed market equities from a long-term perspective and maintaining an overweight position in emerging market equities. Blackrock Institute stated that it does not allocate to the entire market but focuses on industry and regional levels. In developed market equities, it favors the technology sector, as well as AI application industries such as healthcare, and energy sectors related to AI construction and rising power demand. The institution also sees potential in emerging markets related to the AI supply chain, including China, Taiwan, and South Korea. Blackrock Institute believes that Indian stocks will benefit from the disruptive trend of population structure, namely the continuously growing labor force. Blackrock Institute lowered its allocation to fixed income assets in strategic portfolios to increase the allocation to developed market equities. In the fixed income field, it is optimistic about high-yield bonds because they have a shorter duration and lower sensitivity to interest rate fluctuations compared to investment-grade credit bonds, while also providing attractive returns. However, it does not limit itself to a single asset class to construct portfolios. From the perspective of the overall investment portfolio, Blackrock Institute is more inclined to capture growth opportunities through stocks, so it reduced its allocation to high-yield bonds to neutral. The reason is that investors can participate in the potential upside of stock prices, not just income. Blackrock Institute also reduced its allocation to developed market government bonds to underweight to keep the duration risk of long-term portfolios lower than the benchmark. From a strategic investment perspective of five years or more, it anticipates that the duration of sustained inflation will be longer than what is currently priced in the market, thus maintaining an overweight position in inflation-linked bonds. The collision of disruptive trends among asset classes so far this year has made investors more in need of adopting dynamic, scenario-based approaches to address uncertainty. The industry is increasingly recognizing the importance of this shift, focusing more on overall portfolio methods, and breaking through the limits of traditional asset class labels. Infrastructure investment is a typical example. Blackrock Institute believes that infrastructure is expected to perform well in all scenarios, as it has historically demonstrated resilience in market stress. Most investors can enhance their allocation to such assets based on their tolerance for liquidity risk (the risk of not being able to quickly liquidate investment assets).