BlackRock today published new research on the role of big data and artificial intelligence (AI) in investing, and how it can deliver consistent alpha, particularly in periods of increased uncertainty, volatility and dispersion such as markets have experienced since the pandemic.[1]
We believe systematic strategies are poised to play a bigger role in portfolios as they are well positioned to take advantage of the digital age that has created an ocean of information where data creation and storage have increased a 100-fold over the past 15 years[2]. If harnessed correctly, that information can lead to better investment decision-making and potentially new sources of alpha. For example, looking at the active equity category, we project systematic strategies’ market share to increase to 15% in 2030 from 11% in 2024.[3]
BlackRock Systematic has delivered consistent performance with over 90% of its investment strategies beating peer median on a 5-year basis. The business had a record 2024 achieving US$17 billion in net new business, followed by US$23 billion of net new business in Q1 2025, reaching AUM of US$317 billion[4].
Through their scaled approach, systematic strategies can explore broad universes efficiently. These types of strategies can also meet needs across many different use cases such as portfolio building blocks, sources of consistent income or for high alpha generation. The principles of investing at scale with big data, technology and human insight are what set systematic strategies apart.
One specific application is market neutral. Systematic market neutral strategies, including both hedge funds and liquid alternatives, can enhance portfolio diversification by offering return streams that are less correlated with traditional markets.
To capitalise on the greater dispersion in the new macro regime, the BlackRock Investment Institute (BII) finds that qualified investors may benefit from increasing their allocations – by up to 5% in some cases – to skilled hedge funds and market neutral strategies. The BII research shows that investment skill is better rewarded now, while static factor exposures are less well rewarded[5]. That extra allocation could be funded out of developed market government bonds and equities and not necessarily the “alternatives” part of the portfolio. We believe liquidity, risk tolerance and budget should be the most important considerations in sizing allocations.
The Alpha Re-imagined research found that BlackRock Systematic’s proprietary AI model, achieved 61.3% accuracy in forecasting stock returns 40 days after earnings announcements, significantly outperforming leading large language models such as GPT-4 and its successors, which ranged from 49.7% to 54.9%[6].
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.”
For four decades, BlackRock Systematic has focused on innovation to maintain an informational edge. Being part of BlackRock is a structural advantage for our Systematic team as it affords access to unique data sets. BlackRock Systematic analyses 15,000 global equities and 3,000 credit issuers daily, along with tens of thousands of additional inputs. Analysing and understanding this data is essential for investing at scale. This is made possible by leveraging cutting-edge, and often proprietary, sources of information throughout the investment process.
Such technology has made processing significantly more efficient, reducing the time needed to conduct a five-year global equity simulation from three hours to just 1.8 seconds over the past decade.[7] The result highlights BlackRock Systematic’s capability to analyse large datasets by harnessing AI for precision forecasting, delivering stronger signals, enhancing market anticipation, and ultimately driving absolute alpha.
About BlackRock
BlackRock’s purpose is to help more and more people experience financial well-being. As a fiduciary to investors and a leading provider of financial technology, we help millions of people build savings that serve them throughout their lives by making investing easier and more affordable.
