Investors poured $130bn into BlackRock products in the first quarter, chiefly into iShares ETFs tied to AI and big tech. The inflows lifted assets under management to $13.89tn and helped push first-quarter net profit to $2.21bn, with adjusted EPS of $12.53 beating analyst expectations.

Flows lift profits and fees - Net profit: $2.21bn for the three months to March 31 - Total net inflows: $130bn in Q1, mostly into iShares ETFs - Assets under management: $13.89tn (up from $11.58tn a year earlier) - Adjusted EPS: $12.53 vs analyst expectations of $11.54 - Investment advisory performance fees: $272m (vs $60m a year earlier) The jump in performance fees reflects strong results from some active and specialised strategies and helped push BlackRock's shares higher after the results were published. "BlackRock is a scale operator across public markets, private markets and technology," said Laurence Fink, chief executive officer at BlackRock. AI and tech ETFs leading the charge Investors have favoured funds tied to artificial intelligence and broader technology exposure. Gargi Pal Chaudhuri, chief investment and portfolio strategist at BlackRock's Americas, told a recent company update that the AI trade remains one of the firm's highest-conviction themes and should continue to drive earnings growth. She recommended leaning on active management to separate likely winners from the rest, citing the iShares AI Innovation and Tech Active ETF (BAI) as an example where concentrated, active exposure has performed strongly. On the passive side, the iShares Expanded Tech Sector ETF (IGM) was singled out for its large one-year return, reflecting outsized gains among a handful of mega-cap technology and semiconductor companies. That ETF has broad exposure but is top-heavy: the largest names make up a sizable share of its value. Who’s in the portfolios? The Expanded Tech Sector ETF's top 10 holdings account for more than half the fund by value. According to fund data, the ten largest positions and approximate weightings include: - Broadcom ~9.08% - Nvidia ~8.29% - Microsoft ~8.08% - Apple ~7.87% - Alphabet Class A ~4.61% and Class C ~3.68% - Meta Platforms ~4.17% - Micron Technology ~2.86% - Advanced Micro Devices ~2.62% - Netflix ~2.21% Those concentrated holdings help explain why tech-focused iShares ETFs have attracted sizable flows amid market volatility: concentration can amplify gains when a narrow set of stocks leads the market but also raises downside risk if that leadership fades. Volatility, valuation and portfolio strategy Pal Chaudhuri's Spring Investment Directions update noted that stock valuations have become more attractive after recent sell-offs, with earnings estimates holding up while prices fell. Her advice emphasised US large caps as a preferred starting point for many investors and suggested that those seeking greater concentration could look to funds tracking the largest 100 names. She also highlighted that shifting relationships between stocks and sectors mean concentration among a handful of large tech names can both amplify gains and heighten downside risk.

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The flows underline strong demand for AI- and tech-focused ETFs, lifting AUM to $13.89tn and first-quarter adjusted EPS to $12.53.

This article was created with AI assistance.