{"slug": "ai-has-not-killed-equity-diversification-blackrocks-helen-jewell", "title": "AI Has Not Killed Equity Diversification: BlackRock’s Helen Jewell", "summary": "BlackRock International CIO of Fundamental Equities Helen Jewell argues that effective equity diversification remains possible despite the AI trade becoming the most crowded in history, pointing to healthcare, Latin American equities, and UK stocks as overlooked hedges. Jewell notes healthcare has a -0.06 correlation with AI stocks and trades at a 15% discount to the broader market, while Latin America represents 0.8% of the MSCI ACWI but 7% of global GDP. She warns that the AI trade could stall due to over-investment or unforeseen events, citing a recent pullback in the U.S. semiconductor index.", "body_md": "**July 22, 2026**, (Inside AI) — The artificial intelligence trade has become the most crowded in its history, according to **Goldman Sachs**, prompting institutional investors to search for uncorrelated assets. **Helen Jewell**, International CIO of Fundamental Equities at **BlackRock**, argues that effective diversification is still possible, pointing to healthcare, Latin American equities, and UK stocks as overlooked hedges.\n\nOver the past year, an **iShares ETF** tracking AI stocks doubled in value before a recent pullback. The momentum factor—where winners keep winning—has returned nearly **200%** over five years, per **BlackRock**. But this concentration risk is now prompting a rethink.\n\n## The Unseen Hedge: Where Diversification Still Works\n\nJewell’s analysis shows the **MSCI All Country World Index** had a **0.79** correlation with AI stocks over the past 12 months. Healthcare, by contrast, showed a correlation of **-0.06** with AI and just **0.12** with momentum. This near-zero relationship underscores its defensive utility.\n\nHealthcare’s earnings resilience stems from demographic shifts and medical innovation. Yet the sector trades at a **15%** discount to the broader market, a rarity after decades of premium valuations. Jewell cautions that stock selection is critical, noting healthcare had the second-highest dispersion of returns last year, per **FactSet** and BlackRock.\n\nShe highlights firms leveraging AI to analyze medical data for faster disease detection. Such applications could persist even if the AI hype cycle cools. Academic research supports this: a [2023 study on AI in medical imaging](https://arxiv.org/abs/2306.15545) found robust diagnostic improvements independent of market sentiment.\n\n## Beyond the Obvious: Latin America and UK Markets\n\nLatin American equities also show low correlations with AI and momentum. The region represents just **0.8%** of the **MSCI ACWI** but **7%** of global GDP, per BlackRock. Brazilian and Mexican stocks trade at discounts to historical valuations, while most major markets are at premiums.\n\nPotential catalysts include interest rate cuts and rising commodity demand from AI and electrification. Official data from the [IMF World Economic Outlook](https://www.imf.org/en/Publications/WEO) projects Latin America’s growth above the global average, supporting the re-rating thesis.\n\nUK equities, with a **0.26** correlation to AI, have outperformed global stocks on a total return basis over five years. The **FTSE 100**’s exposure to “old economy” sectors—financials, materials, energy—provides a buffer against AI disruption. Jewell notes these sectors could actually benefit from AI through cost-cutting or commodity demand.\n\nPolitical stability could close the valuation gap with developed peers, after a decade of six prime ministers. Jewell suggests that greater confidence might spur domestic investors to join foreign buyers.\n\nThe obvious risk is that AI momentum continues, making diversifiers a drag. But with the **U.S. semiconductor index** already pulling back this month, Jewell argues that holding hedges remains prudent. Her view aligns with **Goldman Sachs**’ warning on crowding, as detailed in their [recent AI investment forecast](https://www.goldmansachs.com/intelligence/pages/ai-investment-forecast-to-approach-200-billion-globally-by-2025.html).\n\nJewell concludes:\n\n**“The AI trade could stall—whether due to concerns about over-investment or some unforeseen event. We’ve already seen a pullback in the U.S. semiconductor index just this month. So holding stocks to help weather the storm still seems prudent.”**\n\nThe column reflects Jewell’s personal views and not investment advice. It comes as institutional portfolios grapple with concentration risks reminiscent of the dot-com era, though today’s AI infrastructure buildout may have more tangible earnings support.", "url": "https://wpnews.pro/news/ai-has-not-killed-equity-diversification-blackrocks-helen-jewell", "canonical_source": "https://insideai.news/news/ai-in-business/ai-has-not-killed-equity-diversification-blackrocks-helen-jewell/4957/", "published_at": "2026-07-22 09:34:46+00:00", "updated_at": "2026-07-22 09:39:26.986312+00:00", "lang": "en", "topics": ["artificial-intelligence"], "entities": ["BlackRock", "Helen Jewell", "Goldman Sachs", "MSCI All Country World Index", "FTSE 100", "FactSet", "iShares", "IMF World Economic Outlook"], "alternates": {"html": "https://wpnews.pro/news/ai-has-not-killed-equity-diversification-blackrocks-helen-jewell", "markdown": "https://wpnews.pro/news/ai-has-not-killed-equity-diversification-blackrocks-helen-jewell.md", "text": "https://wpnews.pro/news/ai-has-not-killed-equity-diversification-blackrocks-helen-jewell.txt", "jsonld": "https://wpnews.pro/news/ai-has-not-killed-equity-diversification-blackrocks-helen-jewell.jsonld"}}