BlackRock has unveiled a research highlighting how big data and AI are reshaping investment strategies and enhancing alpha generation—particularly in volatile markets since the pandemic.
Systematic strategies—which combine scalable computing power, proprietary models and human insight—are suited to the modern data-driven era, according to the asset manager. With global data creation having surged 100-fold in 15 years, it sees a growing opportunity to translate information overload into actionable investment decisions.
According to BlackRock, systematic strategies are set to claim a greater share of active equity investing—rising to 15% market share by 2030, up from 11% in 2024. Their ability to efficiently scan wide investment universes positions them as tools not just for alpha generation, but also for income and portfolio diversification.
BlackRock Systematic, managing $220 billion in assets, applies data-driven insights and rigorously tested strategies to deliver distinct investment outcomes.
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One standout application is systematic market neutral strategies, which include hedge funds and liquid alternatives, according to BlackRock. These strategies can provide non-correlated returns and help diversify portfolios beyond traditional assets.
The BlackRock Investment Institute supports increasing allocations—by up to 5%—to skilled hedge funds and market neutral strategies. Their research found that in today’s high-dispersion environment, investment skill is more rewarded, while broad factor exposures are less effective.
BlackRock’s proprietary AI model outperformed major large language models in forecasting stock returns post-earnings. According to the asset manager, their system achieved 61.3% accuracy over 40 days, compared to 49.7–54.9% for LLMs like GPT-4.
Raffaele Savi, global head of BlackRock Systematic, said: “BlackRock Systematic is constantly innovating with the goal of delivering consistent alpha across asset classes through a scalable and repeatable process, leveraging the latest advancements in data and technology combined with decades of research experience and creativity.”
