BlackRock is a leader in factor investing strategies, managing over $200 billion in dedicated factor portfolios. Key factors BlackRock focuses on include value, momentum, quality, low volatility, and size. BlackRock’s Factor Based Strategies Group, led by renowned academic Dr. Andrew Ang, is at the forefront of research and innovation in factor investing. BlackRock is integrating factors across its indexing and alpha-seeking platforms to provide better solutions for clients.
blackrock built a dedicated factor investing team and platform
In 2015, BlackRock combined two internal factor teams to form the Factor Based Strategies Group (FBSG), bringing together expertise in factor research, portfolio management, and strategy innovation. The hiring of academic thought leader Dr. Andrew Ang in 2016 as head of FBSG raised the profile and influence of BlackRock’s factor capabilities.
fbs group manages significant factor investment assets
FBSG directly manages over $11 billion in factor investment strategies across hedge funds, long-only portfolios, and balanced funds. It also advises on over $120 billion in multi-asset factor allocations across BlackRock. This positions FBSG as a major player in factor investing industry-wide.
blackrock integrates factors into indexes and alpha strategies
Beyond dedicated factor funds, BlackRock is incorporating factors as inputs across its active equity, quantitative, indexing, and multi-asset platforms. Factors help to systematically tilt portfolios towards certain risk premia while maintaining diversification. This trend speaks to the permeation of factor investing throughout investing.
blackrock factors target macro and style premia
FBSG strategies target both macro factors that drive market cycles and cross-sectional style factors. Macro factors like growth and inflation determine market direction and risk appetite. Style factors like value, momentum and volatility generate alpha within the market opportunity set. BlackRock believes factor frameworks better explain asset returns.
As a pioneer in indexing and model-based investing, BlackRock is leading innovation in factor strategies. Its Factor Based Strategies Group is at the forefront of research into how factors can be used to build better portfolio solutions. Factors are also permeating across BlackRock’s diverse investment platforms.