BlackRock is reshuffling its model portfolios to favor large-cap stocks and spread AI exposure beyond the obvious pioneers. This tweak has already sent billions through its ETFs, with the iShares Large Cap Core Active ETF (BLCR) raking in $2 billion this week. Michael Gates, lead portfolio manager, wrote: "We are maintaining a 1% equity overweight and keeping our highest-conviction directional views in place."

The trade is evolving from who builds AI to who actually makes money from AI. BlackRock is also dialing back regional bets, pushing more than $4 billion into the iShares International Country Rotation Active ETF (CORO), while trimming momentum exposure with over $4 billion flowing out of the iShares MSCI USA Momentum Factor ETF (MTUM). BlackRock alone oversees more than $300 billion in model portfolios, roughly double last year's level.

New research from Bloomberg Intelligence's David Cohne shows active bond ETFs continue taking market share from mutual funds, regardless of performance. The active ETF wrapper premium reached about 307 percentage points for outperformers and 105 for those trailing benchmarks. "The large gap for both groups suggests investors may be favoring the ETF structure itself," Cohne wrote.