BlackRock warns of the "diversification illusion" playing out: gold and bonds no longer serve as safe havens, need to expand into alternative assets.

BlackRock Investment Institute points out that traditional hedging tools such as bonds and gold are no longer providing stable protection in market volatility, and investors urgently need to reconsider the diversification of asset allocation. The investment institution emphasizes that a so-called "diversification illusion" is unfolding in real time, driven by the continuous rise in bond yields and a tense geopolitical situation reshaping market dynamics. Since the outbreak of the Middle East conflict, the S&P 500 index has risen by 8%, while Brent crude oil prices have surged by 43%, and the yield on US 10-year Treasury bonds has also risen by nearly 60 basis points. Gold, traditionally seen as a safe-haven asset, has fallen by 15% since the conflict erupted, partly due to overconcentration of positions - indicating that even recognized hedging tools may become unreliable. BlackRock points out in its analysis, "Traditional portfolio diversification is facing challenges in the current environment, highlighting the necessity of seeking more diversified sources." The institution suggests investors "further diversify their diversified tools" and expand their horizons beyond traditional assets. For a strategic investment horizon of five years or more, BlackRock prefers hedge funds and private markets, believing that the trends of these alternative assets are less affected by overall market volatility and more dependent on manager skills. Despite facing many uncertainties, BlackRock still maintains a preference for risk assets, citing strong corporate profit growth and the investment theme of AI as providing strong support for risk assets.