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US investment giant BlackRock has launched a new range of funds seeking to exploit big data analysis and machine learning to find investment opportunities.
The Advantage Series range consists of six funds previously launched in the US in 2017: the World, US, Emerging Markets, Pan-European, Europe ex-UK and Asia ex-Japan strategies.
The range funds will be managed by BlackRock's 80+ strong Systematic Active Equity (SAE) team, based in San Francisco and London, which runs $105 billion (£78.5 billion) in assets.
BlackRock co-head of systematic active equity, Raffaele Savi outlined how the fund range is designed for a brave new world.
'The pace of change in the world today is accelerating. The way people interact, transact, work and consume is unrecognisable from even a decade ago,' Savi (pictured below) said.
'With our new BlackRock Advantage series, we are building on that change and unlocking the opportunities presented by big data including internet search, the geolocation of smartphones and satellite images.'
According to BlackRock, 90% of the assets managed by the SAE team has beaten its stock market benchmark over the past five years.
The managers use a range of technologies, including big data and machine learning to systematically select stocks, spotting 'investment signals' from an array of information sources such as earnings calls with company managements, internet traffic and satellite images.
These signals are then combined to create portfolios that seek consistent, differentiated sources of outperformance above the funds' benchmarks.
The Advantage Series is one of the four suites comprising BlackRock’s Active Equities platform: Systematic Alpha (which includes the Advantage Series), High Conviction, Specialised Outcomes and Thematic.
BlackRock believes one of the big appeals of the range, which is available across Europe, is that it gives investors the opportunity to reassess the risk profile in their portfolio and cost, while accessing different sources of returns.
The funds have set ongoing charges figures of between 30-60 basis points (See table below).
|Range||Ongoing charges %|
'Client demand has evolved beyond a binary call for active or index investment solutions,' said BlackRock head of EMEA retail Michael Gruener (pictured below).
He added: 'Portfolios are now constructed from a range of techniques to reflect the vast array of options and information available to investors.'