BlackRock (NYSE:BLK), the world’s largest asset manager, has released its 2023 midyear outlook report — highlighting five mega forces that’ll drive investment portfolios:

1/ Digital disruption and artificial intelligence — “AI-driven productivity gains could boost profit margins.”

• Companies that spend the most on staffing could see the greatest benefit of automation.
• Those with large sets of proprietary data — which can be used to train AI models — are sitting on a “gold mine.”

2/ Fragmenting world — “We see a world where national security and resilience take priority over efficiency.”

• Recent events, including the Ukraine war and US-China trade disputes, have further divided nations.
• Opportunities will surface as the West “pursues greater self-sufficiency in some areas, like tech and energy.”

3/ “Aging populations produce less income, with implications for consumer spending and public finances.” This could have two major consequences:

• Inflation: We’ve already seen the impact of a worker shortage — and more people leaving the workforce could lead to higher inflation in the long run.
• Demand shift: An older population won’t necessarily spend less but will shift what they buy — leading to senior-targeted opportunities in healthcare, real estate and leisure.

4/ Low-carbon transition — “A decarbonized economy will involve a massive reallocation of capital as energy systems are rewired.”

5/ Evolving financial sector — “Banks face increased competition for financial services, and non-bank lenders are stepping in.”