Active portfolios
start with indexing

Through BlackRock Portfolio Analysis and Solutions’ (BPAS)1 interactions with clients, successful investors stand out because of their:

  • higher index adoption
  • higher adoption of illiquid and ‘real’ alpha-seeking strategies
  • deliberate and adaptable approach to blending these solutions

In line with this, we have seen an ongoing shift to index strategies amongst investors2, with both distributors and end investors changing their perception of the role and value of index vehicles.

Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. You may not get back the amount originally invested.

Active portfolios start with indexing

At BlackRock we believe that actively evaluating your portfolio may lead to a greater role for ETFs and index funds.

  • 1

    Save time

    Constructing portfolios takes time. As the number of products increases, so does the effort required to scout the market and select the best ones.

    Indexing can help to reduce the governance burden required to continually search and reassess managers; allowing you more time to focus on finding true alpha in select areas of the portfolio.

  • 2

    Manage risk

    One of the keys to successful portfolio construction is understanding the risks of your investment, given that unlike returns, these can be more easily predicted and controlled.

    Indexing gives you more control of your portfolio risk, reducing the potential for misalignment between the target portfolio (the strategic asset allocation or Chief Investment Officer (CIO) view) and the real, implemented portfolio.

    Risk: While the investment approach described herein seeks to control risk, risk cannot be eliminated.

  • 3

    Curb costs

    Increased cost transparency coupled with an improved understanding of portfolio return drivers has made indexing tools the more obvious choice for many investors.

    Indexing is not only about lowering overall portfolio costs, but about finding potentially more efficient ways you can achieve similar outcomes.

Navigating portfolio challenges

Find out how other investors have solved common portfolio challenges through using indexed solutions.

Read case studies

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1BPAS (BlackRock Portfolio Analysis and Solutions) is a team of portfolio consultants which seeks to provide industry leading tools, analysis and insights for our clients. Through customised, outcome-orientated client engagements around portfolio construction and risk management, the team can assist clients with asset allocation, portfolio restructuring and implementation decisions.

2BlackRock Portfolio Analysis and Solutions, from January 2017 – January 2022.


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