BlackRock Quant investment strategies to take the place of out-of-favour active managers
"[BlackRock] plans to switch their funds to quantitative investment strategies, in what chief executive Larry Fink called a “pivot” away from areas of active management that have fallen out of favour. [The company] said it was introducing sweeping changes across its troubled actively managed equities funds, in a new example of the upheaval being wrought across the asset management industry by an investor shift towards lower cost passive funds.
In 2016 $20 billion flowed out of its actively managed equities business .. Across the industry, funds whose managers use traditional fundamental investment research to try to pick winning stocks in highly liquid and efficient markets such as the US have consistently been shown to lag behind cheap index-tracker funds, and have suffered accelerating outflows.
The changes stretch beyond the US large-cap equity funds that have borne the brunt of the shift to passive investing and whose long-term results have been the worst compared to their benchmarks." (FT.com, 2017)
We welcome this news as further evidence of the demand (and requirement) for strategies with a quantitative edge. Reducing costs and fees is key to consistent performance, however at ALPIMA we see the addition of quant customization & personalization as the holy grail of a superior product and service.
Financial Times: https://www.ft.com/content/b0056320-13e3-11e7-b0c1-37e417ee6c76
Wall Street Journal: https://www.wsj.com/articles/blackrock-bets-on-rob...