Speakers: Susan Chan (Head of Asia-Pacific at BlackRock) interviewed by Rebecca Sin (Bloomberg Intelligence).
Regional Landscape: [00:00:21] Susan Chan notes that Hong Kong is "booming," a sentiment matching earlier comments by Hong Kong Financial Secretary Paul Chan.
Market Activity: [00:00:35] Regional volumes have expanded significantly, marked by a $400 billion figure referenced from Paul Chan's session.
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Core Investor Themes: [00:01:07] Client allocations are prioritizing three structural engines: Active Mutual Funds, ETFs, and Private Markets. Within active strategies, the regional hunger remains centered on thematic funds, diversified yield/income plays, high-demand hedge funds, and systematic/quant funds.
The Massive Structural Scaling of ETFs
The Active/Passive Coexistence: [00:02:30] Susan Chan explains that BlackRock's framework relies on bringing active and passive execution together, a philosophy cemented when they integrated Barclays Global Investors (BGI). The baseline view is that all allocation decisions are active choices, whether opting for an index fund, active manager, or alternative asset class.
The Scale of Capital Markets:
[00:03:01] Globally, the ETF space has reached $22 trillion.
[00:03:11] In stark contrast, the Asia-Pacific (APAC) ETF footprint is just north of $1 trillion, indicating room to scale to $10 trillion or $20 trillion if local markets continue optimizing.
[00:03:50] Rebecca Sin notes that Bloomberg Intelligence estimates global ETF assets will cross $50 trillion by 2035.
[00:03:20] APAC represents 18% of global Asset Under Management (AUM) today, projected to cross 25% by 2030.
Hong Kong Active Yield Ecosystem: [00:02:02] Hong Kong's ETF ecosystem has surpassed $100 billion in AUM. Rebecca notes that local active ETFs are highly distinctive income tools, with specific variants paying out more than a 20% yield on a monthly distribution basis.
Tech De-risking Realities, Volatility, and Tokenization
Deconstructing the Tech/AI Corrections: [00:04:12] When pushed on recent technology sell-offs, Chan refutes structural panic. Volatility was driven by temporary technical dynamics:
Liquidity requirements to fund large, upcoming mega-IPOs / new listings (such as an upcoming Friday listing).
Geopolitical frictions and macroeconomic events originating from the Middle East.
Investor Risk Profiles: [00:04:50] BlackRock observed that market sell-offs did not yield a rush to de-risk. Instead, clients deployed capital on the dips, re-engaging "risk-on" positioning to secure alpha during volatile swings.
Crypto Infrastructure & Tokenization: [00:05:51] BlackRock continues to see robust demand for its spot Bitcoin ETF (the largest globally). Regionally, BlackRock has listed crypto capabilities in Australia and is evaluating wider APAC distribution, including Hong Kong.
Physical Redemptions: [00:05:55] Hong Kong’s tokenization and crypto-hub ambitions are gaining concrete commercial expressions, including localized products that permit an investor to buy an ETF and seamlessly redeem it for physical gold jewelry or physical gold bars.
High-Conviction Structural Plays in APAC
The EM Weight Shift (Korea & Taiwan): [00:06:52] The infrastructure demand of artificial intelligence is inducing permanent tectonic shifts. In South Korea, the AI narrative has propelled names like Samsung and SK Hynix to unprecedented operational tiers.
The MSCI Rebalance: [00:07:07] Highlighting the scale of this shift, during the late May / early June MSCI index rebalancing, Korea’s weight within the Emerging Markets (EM) index jumped from roughly 8–9% straight to 22%.
Japan’s Structural Exit: [00:07:26] Japan remains a top-tier global destination due to the definitive end of long-term deflation. Key institutional entry points for BlackRock feature private credit, infrastructure, and broader private markets.
ASEAN Diversification Currents: [00:07:53] Investors across Southeast Asia are dealing with demographic headwinds and depreciating local currencies. This has triggered an active push to diversify outside home countries and secure US-dollar assets to balance long-term portfolios.
Death of the 60/40 Paradigm and the Private Markets Defense
The Obsolescence of 60/40: [00:08:18] The standard 60% equity and 40% fixed-income framework is structurally underperforming. It cannot generate the return outcomes required to handle demographic changes and pension shortfalls across aging Asian populations.
The 50/30/20 Target Model: [00:11:51] Asset allocation is moving toward holistic, multi-asset portfolios. Capital allocators are increasingly looking toward variations like 50% Equities, 30% Fixed Income, and 20% Private Markets.
The Private Credit Correction Narrative: [00:10:09] Addressing negative press headlines surrounding liquidity shortages and structural strains in private credit, Chan dismisses systemic alarms as sensationalism. Default rates across the macro asset class remain exceptionally low; pockets of distress are highly idiosyncratic and name-specific.
Strategic Acquisitions: [00:10:58] BlackRock’s three major recent alternative asset acquisitions reflect the absolute necessity of infrastructure and private credit for long-term compound growth. Additionally, infrastructure investments provide private capital an direct mechanism to participate in domestic nation-building and physical development.
Undervalued Value Pockets: China and Asian Public Credit
The China Rebound: [00:14:04] Approximately 18 months ago, the international consensus labeled China as completely "uninvestable." Currently, relative valuations have bottomed to deeply discounted levels, representing immense unexpressed value that will be unlocked as downstream AI mega-forces and "Asia-for-Asia" regional allocations pick up speed.
The Compounding Argument: [00:13:04] Highlighting the cost of sitting on the sidelines, Chan shares an anecdote from her recent trip to Shanghai: If an investor put $1 into Chinese equities over the past 20 years, it would have generated an average annualized return of 6.5% per annum, compounding to over 300 times the initial layout. Leaving capital entirely in cash completely misses this compounding engine.
Asian Fixed Income & Credit: [00:14:50] Public Asian credit stands out as a highly resilient and deeply undervalued asset class with strong yields. However, it is primarily a primary-issuance tool, suffering from limited secondary-market trading volumes. Global and regional institutions must cooperate to scale secondary market liquidity to optimize the asset class.
Downstream AI & Defensive Layering: [00:16:12] For the next 3 to 5 years, incremental capital should look downstream from core AI hardware into sectors poised to benefit next—specifically healthcare and biotechnology—while layering in Asian fixed income as a resilient anchor.
Two Decades of AI Integration and Talent Top-Stacking
Historical AI Infrastructure: [00:17:14] BlackRock is not reacting to recent generative hype; its Systematic Quant Group has actively designed, tested, and executed investment strategies utilizing machine intelligence and AI tools for more than two decades.
Scale-Level Execution: [00:17:51] While individual co-pilots are now standard baseline organizational tools, BlackRock's priority is the structural, strategic scaling of AI across long-term core operational processes.
The Human Capital Shift: [00:18:35] AI is not projected as a workforce displacement engine, but rather an efficiency lever designed to remove administrative drag and push human talent "up the stack" to higher-value roles. This architectural shift is actively creating entirely new, non-traditional corporate mandates focused directly on AI data governance, algorithmic risk oversight, and compliance protocols.
Jul 16, 2026
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