Solutions For End-investors

Systematic investing, different by design

By combining the power of big data, data science, and deep human expertise to modernize the way we invest, systematic investing is unlocking new ways to seek consistent portfolio outcomes amidst a world of unpredictability.


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

What is systematic investing?

Systematic investing, often called quantitative investing, is an investment approach that emphasizes data-driven insights, scientific testing of investment ideas, and advanced computer modelling techniques to construct portfolios.

Different by design

The quantitively-driven process of systematic investing expands what is possible when investing—from searching for investment insights, constructing portfolios, to ultimately delivering more targeted outcomes to investors.
data technology icon
Human X Machine
Fundamentally sound investment ideas are validated by quantitative testing—Amplifying human decision making but keeping behavioral bias in check.
choice arrows icon
Engineered for Scale
Technology-driven process helps scale investment insights across vast sets of securities—creating highly diverse portfolios while avoiding hidden concentration risks.
target icon
Targeted Outcomes
Tech-enabled investment experts optimize portfolios for complex risk and return trade-offs—helping to target the investment outcomes that you expect.

Systematic investment process

The world is more data-driven than ever before. Our systematic process leverages vast sets of data, both traditional and alternative, to provide investment insights faster, at greater scale and with more granularity. We score and rank thousands of securities daily to help make investment decisions in real time, based on company fundamentals, market sentiment and macroeconomic themes.

Our fundamental signals perform the same analysis a traditional security analyst might. Our models leverage data and technology to systematically evaluate thousands of securities. Using alternative data, such as internet search, transaction activity, and geolocation data, we score the attractiveness of investment opportunities against more traditional accounting measures.

Our sentiment signals recognize factors other than fundamental strength can influence returns over shorter time frames. Sentiment signals analyze a broad range of market views from sell side 1analysts, company management, and other investors. Electronic text forms a large part of the underlying data that drives these insights and seeks to enable our models to identify where analysts and management are more positive (or negative) on a company’s outlook.

Our macroeconomic signals seek to form a view across groups of securities rather than individual companies. For example, we analyze the impact of positive hiring trends or adverse inflationary pressures across a universe of securities. We evaluate the impact of macroeconomic data among countries, industries, and equity styles, such as value and growth.

The final score for every security is a weighted combination of all signals, blending the views across these insights.

The final “alpha” score represents our assessment of the return potential of each security relative to all the others within the investible universe.

Portfolio Construction

Our investment process2 seeks to systematically capture the drivers of future returns, to create a portfolio that seeks to maximizes exposure to our signal views. We construct portfolios starting with these final alpha scores and size positions aligned with these scores. A market neutral portfolio would hold a long position3 in securities with a positive score, and a short position4 in securities with a negative score.

However, this doesn’t tell us anything about risk and implementation frictions such as transaction costs and constraints. To account for this, we take into consideration the expected return of a position, alongside an assessment of its potential risk using a multi-factor risk model.

Whether the portfolio being generated is a market neutral hedge fund designed to deliver an uncorrelated source of alpha, or a long only portfolio seeking to outperform a broad index of market exposure, the process is identical. The final output is intended to capture the broadest possible opportunity set within the target market, as we seek to achieve the best possible tradeoff between risk and return net of transaction costs.

DISCLAIMERS

There is no guarantee that a positive investment outcome will be achieved.

While the investment approach described herein seeks to manage risk, risk cannot be eliminated.

For investors in Italy: This document is marketing material. Before investing please read the Prospectus and the PRIIPs KID available on www.blackrock.com/it, which contain a summary of investors’ rights.

Risk Warnings

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

Past performance is not a reliable indicator of current or future results and should not be the sole factor of consideration when selecting a product or strategy.

Changes in the rates of exchange between currencies may cause the value of investments to diminish or increase. Fluctuation may be particularly marked in the case of a higher volatility fund and the value of an investment may fall suddenly and substantially. Levels and basis of taxation may change from time to time and depend on personal individual circumstances.

The strategies discussed are strictly for illustrative and educational purposes and are not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. There is no guarantee that any strategies discussed will be effective.

This material is prepared by BlackRock and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of the date shown above and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and non-proprietary sources deemed by BlackRock to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by BlackRock, its officers, employees or agents. This material may contain ’forward looking’ information that is not purely historical in nature. Such information may include, among other things, projections and forecasts. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this material is at the sole discretion of the reader. This material is intended for information purposes only and does not constitute investment advice or an offer or solicitation to purchase or sell in any securities, BlackRock funds or any investment strategy nor shall any securities be offered or sold to any person in any jurisdiction in which an offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction. Investment involves risks. Past performance is not an indication for the future performance.

In the UK and Non-European Economic Area (EEA) countries: this is Issued by BlackRock Investment Management (UK) Limited, authorised and regulated by the Financial Conduct Authority. Registered office: 12 Throgmorton Avenue, London, EC2N 2DL. Tel: + 44 (0)20 7743 3000. Registered in England and Wales No. 02020394. For your protection telephone calls are usually recorded. Please refer to the Financial Conduct Authority website for a list of authorised activities conducted by BlackRock.

In the European Economic Area (EEA): this is Issued by BlackRock (Netherlands) B.V. is authorised and regulated by the Netherlands Authority for the Financial Markets. Registered office Amstelplein 1, 1096 HA, Amsterdam, Tel: 020 –549 5200, Tel: 31-20-549-5200. Trade Register No. 17068311 For your protection telephone calls are usually recorded.

In Italy: For information on investor rights and how to raise complaints please go to https://www.blackrock.com/corporate/compliance/investor-right available in Italian.

In South Africa: Please be advised that BlackRock Investment Management (UK) Limited is an authorised Financial Services provider with the South African Financial Services Board, FSP No. 43288.

In Singapore, this is issued by BlackRock (Singapore) Limited (Co. registration no. 200010143N). This advertisement or publication has not been reviewed by the Monetary Authority of Singapore.

In Hong Kong, this material is issued by BlackRock Asset Management North Asia Limited and has not been reviewed by the Securities and Futures Commission of Hong Kong.

In South Korea,

this information is issued by BlackRock Investment Management (Korea) Limited. This material and the BlackRock website (www.blackrock.com/kr) have not been reviewed by the Financial Supervisory Service in Korea.

In Australia, issued by BlackRock Investment Management (Australia) Limited ABN 13 006 165 975 AFSL 230 523 (BIMAL). The material provides general information only and does not take into account your individual objectives, financial situation, needs or circumstances.

Before making any investment decision, you should assess whether the material is appropriate for you and obtain financial advice tailored to you having regard to your individual objectives, financial situation, needs and circumstances. Refer to BIMAL’s Financial Services Guide on its website for more information. This material is not a financial product recommendation or an offer or solicitation with respect to the purchase or sale of any financial product in any jurisdiction.

Any research in this document has been procured and may have been acted on by BlackRock for its own purpose. The results of such research are being made available only incidentally. The views expressed do not constitute investment or any other advice and are subject to change. They do not necessarily reflect the views of any company in the BlackRock Group or any part thereof and no assurances are made as to their accuracy.

This document is for information purposes only and does not constitute an offer or invitation to anyone to invest in any BlackRock funds and has not been prepared in connection with any such offer.

Prepared by BlackRock Investments, LLC. Member FINRA.

© 2024 BlackRock, Inc. All Rights reserved. BLACKROCK is a trademark of BlackRock, Inc. or its affiliates. All other trademarks are those of their respective owners.

1 Sell side: refers to a portion of the financial industry that issues, sells, or trades securities in the public market.

2 Source: BlackRock, 2024. Investment process is subject to change and is provided here for illustrative purposes

3 Long position: A long position refers to the purchase of an asset with the expectation that its value will increase over time.

4 Short position: A short position refers to borrowing a security, selling it, then buying it back later at a lower price to return to the broker and keep the difference.

As investment processes become more efficient at absorbing and leveraging information in real time, in our view, building systems that can scale and multiply the value of these insights will provide a significant investment advantage.

Raffaele Savi
Global Head of BlackRock Systematic

BlackRock Systematic Investing

By combining cutting-edge technology, scientific research, and human insight, we are continually innovating to help improve investment outcomes for clients.

$304
Billion AUM across equities, fixed income, and alternatives

Our systematic investment platform delivers solutions for the whole portfolio and is backed by the global scale and technological resources of BlackRock.

Increase300
Unstructured data sources utilized

Our investment experts seek to maintain an informational advantage by constantly evaluating new data sets and utilizing the latest applications of evolving technologies to uncover potential alpha opportunities.

Increase35
Year track record of innovation in systematic investing1

As leaders in the field of systematic investing, we were one of the pioneers in quantitative investing more than three decades ago and have been devoted to innovating ever since.

Increase220
People including investment experts and technologists

Our diverse pool of talent helps us constantly evolve our thinking and deepen our understanding of the investment world.

Increase700
Alpha signals helping to drive investment insights

Our investment experts seek to harness the superabundance of data and cutting-edge analytical techniques to find new and novel sources of differentiated alpha.

Increase45
Global developed and emerging markets covered

Our technology-driven process analyzes 15,000+ equity securities and 3,000+ bonds issuers across 45 different countries—enabling us to have an investment view on thousands of securities every day.

BlackRock Systematic, as of 10/25/2024. For illustrative purposes only.