Although Koesterich said investors should bring down their allocation to U.S. stocks, the strategist prefers sectors such as energy and technology that are leveraged to international growth, and large companies with a lot of sales overseas. [iShares: Is the US Consumer Back?]
Conversely, he advised avoiding expensive parts of the U.S. market investors are gravitating to for perceived safety, such as utilities and consumer staples.
“They’re expensive because people want to avoid volatility by bidding up companies less sensitive to the economy,” the BlackRock executive said. [Consumer Staples ETFs: Don’t Overpay for Safety]
BlackRock manages the iShares lineup of ETFs.
iShares MSCI Emerging Markets (NYSEArca: EEM)
Full disclosure: Tom Lydon’s clients own EEM.