A bigger role for active strategies

Generating alpha now and in the future

Active managers aim to generate the excess returns to meet investors’ long-term objectives. BlackRock’s scale supports our key competitive advantage – we believe we have the ability to unlock unique sources of alpha through deep collaboration.

Below you will find insight from our active investment teams on the areas of the market they believe offer alpha opportunities across:

• Fundamental equities
• Systematic equities
• Fixed income
• Multi-Asset
• Liquid alternatives

Capital at risk. All financial investments involve an element of risk. Therefore, the value of the investment and the income from it will vary and the initial investment amount cannot be guaranteed.

The quest for quality

Great businesses that can sustain high returns over long periods are rare but, we believe, may offer significant alpha – especially as markets have a history of undervaluing these winning business models.

Marshalling the mega forces

The market may be underestimating some long-term drivers of growth – or mega forces – such as digital disruption and AI, healthcare and the low-carbon materials transition.

Regional opportunities

Europe and Japan are ripe for stock pickers to source quality and earnings linked to the mega forces.

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Navigating market themes with artifical intelligence

Large language models can help uncover the cascading effects of trending market themes, revealing not just the direct winners and losers, but also second and third order impact of the theme.

Capital appreciation and higher income

Systematic investors can simultaneously harvest data to pursue capital appreciation while also implementing strategies to deliver higher levels of income to meet cash flow needs.

Harvesting ESG data

Because there is no single global standard for how ESG information should be analysed and disclosed, sustainability data could provide powerful clues into company fundamentals.

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High Yield

Elevated yield levels are driving demand for high yield. Idiosyncratic opportunities present in this market that can offer upside if carefully managed. Active managers could be key to capturing returns.

Emerging markets

Fundamentals are strong with global and emerging markets (EM). Investment opportunities exist in EM countries, tackling fiscal and external imbalances, and/or deleveraging their economies.

Emerging market investments are usually associated with higher investment risk than developed market investments. Therefore, the value of these investments may be unpredictable and subject to greater variation.

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Managing the near-term, investing for the long term

This environment requires a heightened need for diversification, a focus on portfolio construction, and a highly dynamic approach to asset allocation.

New sources of diversification and potential alpha

Portfolio builders may benefit from looking beyond traditional asset classes and seek out investments that can offer a differentiated and complementary risk/return profile.

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New sources of diversification and potential alpha

Portfolio builders may benefit from looking beyond traditional asset classes and seek out investments that can offer a differentiated and complementary risk/return profile.

Market dispersion

The new regime could offer greater potential to generate returns in the cross-section of markets by exploiting the spread in performance between long and short holdings, in our view.

A rich opportunity set

Investors who apply a rigorous fundamental process and who can take both long and short single stock positions can benefit from exposure to a breadth of diverse markets and geographies.

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