Systematic fixed income investing

Where art meets (data) science

Systematic investing is uncovering new opportunities in fixed income by combining vast datasets, scientific research, and deep human expertise to make sense of market complexity.

What is systematic fixed income investing?

Systematic investing, sometimes called quantitative investing, is a rapidly developing field in fixed income. Systematic fixed income strategies:

  • Employ an objective, disciplined and repeatable investment process
  • Utilize investment models to identify, test, and implement ideas
  • Increasingly incorporate emerging technologies like big data and machine learning to find new market opportunities

Benefits of a systematic approach in fixed income

Systematic fixed income strategies employ unique data-driven insights backed by disciplined risk controls that seek to deliver differentiated portfolio outcomes to investors.
Unique insights
Fundamental ideas are validated and tested by quantitative research.
Disciplined risk management
High breadth portfolios seek the best risk-adjusted return opportunities.
Differentiated outcomes
Targeted outcomes through beta, factor and alpha-seeking strategies.

The spectrum of systematic styles

A systematic approach can be implemented across fixed income asset classes and investment styles. It can range from cap-weighted indexing, to factor-based and actively-screened strategies, or even long/short alternatives. Quantitative-based strategies can be used to manage risk, complement fundamental managers or be combined to form a custom solution.

Spectrum of systematic styles

For illustrative purposes only.

Systematic Research: By the Numbers
Get our latest data-driven perspectives on fixed income markets in our publication called By the Numbers.
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Systematic fixed income solutions

BlackRock takes a unique approach to systematic investing with a focus on scientific research, human expertise, risk management and a clear understanding of what differentiates beta, factors (1) and alpha (2) return sources in fixed income.


Our systematic alpha-seeking fixed income strategies seek high quality alpha through a consistent, repeatable process that validates fundamentally oriented market insights with quantitative research.


  • Multi-sector strategies that seek to outperform a market index by actively screening securities and tilting towards different sectors

Credit Screened

  • Investment grade, high yield or emerging market strategies that seek to avoid issuers that appear higher risk based on propriety screens and analytics
  • Our factor-based strategies target broad and persistent sources of returns that have historically driven fixed income markets. These strategies seek outcome-oriented and differentiated results compared to market-cap weighted indexes.

Balanced Risk

  • Multi-sector bond strategies that balance macro factors like credit and interest rate risk to seek improved risk-adjusted returns

Style Factors

  • Investment grade and high yield strategies using factor insights to target high quality and undervalued securities to seek improved risk-adjusted returns

Our fixed income index strategies help access broad or specific market cap-weighted exposures in efficient and cost-effective solutions.


  • Broadly diversified fixed income holdings typically used as core, low-cost portfolio allocations


  • Strategies that track specific credit markets such as investment grade and high yield corporates

Other Targeted Exposures

  • Strategies that provide market exposure to specific sectors, regions, maturities or credit qualities
  • Our systematic alternative strategies employ our best ideas using multiple, independent and risk controlled alpha models. These strategies seek uncorrelated returns to traditional asset classes like equities and fixed income.


  • Seek total return through a diversified mix of global assets and strategies using a systematic, credit-oriented approach

Unique credit insights aim to provide returns in both up and down markets with low correlation to stocks and bonds.

Understanding the systematic investment process

A common perception of quantitative bond investing is that it is a “black box,” with trade ideas being spit out by a machine. In practice, experienced professionals are critical to generating and refining investment ideas.

BlackRock’s systematic idea generation in action:

  1. Idea generation – Researchers identify investment ideas and any dislocations in markets.
  2. Qualitative testing – Top ideas are evaluated to see if they are sensible, predictive, consistent, and additive to the portfolio.
  3. Quantitative testing – If the idea fits all four criteria, it is tested quantitatively through an academically-oriented process.
  4. Development of model – The idea is built into a model that incorporates estimated risk, return and trade costs. Modelling ideas ensures that they are implemented in a systematic and unbiased manner.

Why BlackRock for systematic fixed income investing?

Innovative drive
Over 18 years of innovation across quantitative fixed income investment styles*
Unrivaled scale
Manage over $1trillion in systematic alpha-seeking, factor and index strategies*
Technological leader
Backed by Aladdin®, our sophisticated risk management platform

Innovation is at the heart of our investment platform, with our strategies supported by the scale and technological backbone of BlackRock.

Tom Parker
CIO of Systematic Fixed Income