In its latest 2025 thematic outlook, iShares, BlackRock’s ETF unit, predicts a bright future for biotech, Bitcoin, and gold ETFs. The report highlights declining interest rates, infrastructure spending, and ongoing innovation in artificial intelligence (AI) as major factors shaping next year’s investment landscape.
Biotech ETFs: Poised for a Comeback
After a challenging year marked by high borrowing costs, biotech ETFs are set to rebound as interest rates decline. According to Jay Jacobs, BlackRock’s U.S. Head of Thematic and Active ETFs:
“Lower rates could reduce financing costs, giving biotech firms the confidence to expand R&D budgets.”
Key performance metrics:
- iShares Biotechnology ETF (IBB): Down 1.6% in 2024.
- SPDR S&P Biotech ETF (XBI): Up 3%, compared to the S&P 500’s 24% gain.
This underperformance positions biotech ETFs as attractive investments for 2025, especially as funding conditions improve.
Bitcoin and Gold: Benefiting from Lower Real Interest Rates
Non-interest-paying assets like Bitcoin and gold tend to thrive when real interest rates decline. The report forecasts:
- Bitcoin will gain from increased adoption and reduced opportunity costs.
- Gold remains a reliable hedge against geopolitical and economic uncertainties.
Central banks’ gold accumulation also supports the metal’s upward trajectory. Goldman Sachs analysts recommend a $3,000 price target for gold by the end of 2025.
| Asset | 2025 Forecast | Catalyst |
|---|---|---|
| Bitcoin | Continued growth | Lower rates, institutional adoption |
| Gold | $3,000 target by 2025 | Central bank buying, safe-haven demand |
| Biotech ETFs | Recovery and R&D growth | Declining financing costs |
Infrastructure and AI: The New Growth Frontiers
Infrastructure spending and AI innovation are also driving investment opportunities. Highlights include:
- $720 billion in funds from the Infrastructure Investment and Jobs Act still awaiting allocation.
- Continued investment in AI ecosystems, with sectors like manufacturing and green energy benefiting.
Jacobs emphasized:
“Massive investment in infrastructure and AI will sustain growth for years to come.”
Why These Sectors Are 2025’s Best Bets
With favorable interest rate environments and targeted government policies, sectors like biotech, Bitcoin, and gold are well-positioned for growth. Combined with advancements in AI and infrastructure, these investments present compelling opportunities for investors in 2025.
Disclaimer: This article is for informational purposes only. Investment decisions should be made based on personal financial goals and risk tolerance.
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