Taking stock

BlackRock |Jun 6, 2016

"The use of new tools and new forms of analysis is not limited to quantitative managers. On the fundamental side, more robust risk models can help managers to reduce volatility in the short term, while staying focused on the long-term drivers of return. In both cases, they are a means of amplifying human intelligence, not replacing it.
As markets continue to adjust to an environment in which macroeconomic policy no longer lifts all boats, investors may have a difficult time generating the type of equity returns they need from beta exposures. With the return outlook for fixed income looking even more challenging than the outlook for equities, it will be increasingly critical for investors to maximize returns in the equity portion of their portfolios. We think that one of the ways to accomplish this is to take an active approach that is underpinned by innovative research."

Market disconnect

CEO sentiment, Internet search activity and market performance in Italy

Marekt disconnect

Sources: BlackRock, Bloomberg, Google. May 2016.

"The use of new tools and new forms of analysis is not limited to quantitative managers. On the fundamental side, more robust risk models can help managers to reduce volatility in the short term, while staying focused on the long-term drivers of return. In both cases, they are a means of amplifying human intelligence, not replacing it.
As markets continue to adjust to an environment in which macroeconomic policy no longer lifts all boats, investors may have a difficult time generating the type of equity returns they need from beta exposures. With the return outlook for fixed income looking even more challenging than the outlook for equities, it will be increasingly critical for investors to maximize returns in the equity portion of their portfolios. We think that one of the ways to accomplish this is to take an active approach that is underpinned by innovative research."