Core Insights - The exchange-traded funds (ETFs) market is experiencing record inflows, with US ETFs attracting $171 billion in new assets in October, bringing year-to-date net sales to over $1.1 trillion, approaching total inflows for all of 2024 [2] - The market's strength is largely driven by a few tech-focused firms, with 48% of US equity firms down this year and 70% trailing the overall market, indicating underlying weaknesses despite the overall positive trend [3] - Active ETFs have seen unprecedented inflows, with $338 billion raised in the first three quarters of the year, surpassing total inflows from 2021 to 2023 combined [4] ETF Market Dynamics - The SEC's pending approval of dual share classes is expected to enhance the market share of active ETFs, benefiting investors through lower fees and increased tax efficiency [5] - JPMorgan led the sales in the ETF market with nearly $45 billion, driven by its Nasdaq Equity Premium Income ETF (JEPQ) and Equity Premium Income ETF (JEPI) [6] - The iShares US Equity Factor Rotation Active ETF (DYNF) was the top-selling active ETF, with sales of $10.1 billion [6] - First Trust, Innovator, and YieldMax launched the highest number of active ETFs, with 24, 23, and 19 respectively, while State Street launched the most products in the third quarter with 14 [6]

Core Insights - BlackRock is increasing its exposure to US equities and artificial intelligence, reflecting confidence in the US stock market's performance and potential growth in AI spending [1][3][4] Group 1: Investment Strategy - BlackRock's model portfolios are now 2% overweight in equities, shifting focus from international developed stocks to US stocks due to strong earnings performance [2][3] - The firm has seen significant inflows into its ETFs, with $3.4 billion entering the iShares S&P 100 ETF, marking its largest one-day influx [6] Group 2: Market Performance - The S&P 500 has reached all-time highs this year, driven by enthusiasm for AI and expectations of a Federal Reserve interest-rate-cutting cycle [3][4] - US corporate earnings have grown by 11% since Q3 2024, significantly outperforming developed markets, which have seen less than 2% growth [3][4] Group 3: AI Focus - BlackRock is shifting from a broad-based US tech ETF to an AI-focused fund, indicating a strategic pivot towards AI investments [7] - Nearly $1.4 billion flowed into the iShares AI Innovation and Tech Active ETF, while the iShares US Technology ETF experienced a loss of $2.7 billion [7] Group 4: Model Portfolio Growth - BlackRock's model portfolio assets have increased to approximately $185 billion, up from $150 billion earlier this year, highlighting the growing popularity of these investment strategies [5]