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.

Through BlackRock Portfolio Analysis and Solutions’ (BPAS) 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 investors3, with both distributors and end investors changing their perception of the role and value of index vehicles.

  • save time

    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.

  • manage risk

    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.

  • curb costs

    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.

3Source: BlackRock Portfolio Analysis and Solutions, from January 2017 – April 2021.