BlackRock’s head of thematics Jay Jacobs on the great acceleration

In this week’s episode of Opto Sessions, Jay Jacobs, US head of thematics and active equity ETFs at BlackRock, gives listeners insight into the asset manager’s expanded line of megatrend ETFs. From the industrial renaissance to the power of the purse and the upshot of post-Covid-19 medicine, Jacobs highlights the three different areas driving the great acceleration.

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Since heading up BlackRock’s US thematics and active equity exchange-traded funds (ETFs) division in April 2022, Jay Jacobs has spearheaded the asset manager’s research and development of investment megatrends.

Later that month, Jacobs co-authored a 28-page white paper titled ‘The Great Acceleration’, which highlighted the exponential growth opportunities that are unfolding as part of the rapidly increasing pace of change.

“[The purpose was to] bring together several different groups across BlackRock’s investment platform — the megatrends team within the iShares ETF group, within BlackRock’s systematic equities group, within our fundamental equities group [as well as] both active portfolio managers in the index-based side of the business — to think through this really unique situation that we’re in right now,” Jacobs tells Opto Sessions.

The three different areas of what Jacobs calls “drivers of progress” that the paper highlights are the industrial renaissance, the power of the purse and the upshot of post-Covid-19 medicine, which is “one of the transformational changes happening in the healthcare space”. He explains that the power of the purse is about the rising consumer, which has been driven by the growth in millennials’ buying power and increasing consumption in emerging markets.

The industrial renaissance, meanwhile, has grown off the back of the underinvested industrial side of the economy, which has emerged as problematic. As a result, companies are increasingly investing in the digitalisation of supply chains to deal with rising manufacturing demand. Within this theme, BlackRock is most excited about the infrastructure, automation and robotics, and electric and autonomous vehicle (EV/AV) spaces.

“[Process automation] is an area that I think is an incredible opportunity that we’ve only really skimmed the surface of. There are a lot of different expressions of AI [artificial intelligence], at home and at work, that I think will be very supportive of GDP growth going forward. But it’s very difficult to — because AI is a tool that we can apply to so many different parts of the economy — forecast exactly how powerful that’ll be,” he considers.

BlackRock’s iShares Robotics and Artificial Intelligence Multisector ETF [IRBO] looks at various segments, including the manufacturers of robots, developers of AI technology and the hardware behind it. On the industrial renaissance side, the fund issuer offers investors exposure to US-based infrastructure assets and enablers through its iShares Global Infrastructure ETF [INFR] and the EV/AV space with the iShares Self-Driving and Tech ETF [IDRV].

“Each of these funds is looking at the entire ecosystem behind these themes. It’s not one company or one segment, it’s really several segments that we see benefiting from the rise of these powerful megatrends.”

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