Why JioBlackRock MF thinks India’s growing equity universe demands systematic active equity approach?

With India’s equity market witnessing a remarkable expansion over the past decade driven by a surge in listed companies, improved liquidity, and rising investor participation, this expansion has created new opportunities, it has also increased the complexity of managing vast data and diverse investment opportunities.

According to JioBlackRock Mutual Fund, the answer lies in adopting a Systematic Active Equity (SAE) approach, a technology-driven investment approach that combines human expertise with a data-driven model to build a portfolio.

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The fund house posted on social media platform X that, “India’s stock market has expanded rapidly over the past decade, with a surge in listed companies and improved liquidity. This growth has increased the complexity of managing vast data and diverse investment opportunities.”

“To navigate this evolving landscape, we adopt the Systematic Active Equity (SAE) approach — leveraging both traditional and alternative data through the Aladdin platform. Our rules-based framework minimises subjectivity and bias, reinforces investment discipline, and aims to unlock sustainable, long-term equity growth,” JioBlackRock Mutual Fund added.

https://x.com/JioBlackRockmf/status/1984183804664127950The SAE approach leverages both traditional and alternative data through advanced analytics on the Aladdin platform.The fund house further adds that their rules-based framework minimises subjectivity and bias, reinforces investment discipline, and aims to unlock sustainable, long-term equity growth.

What is the SAE strategy?

The scheme shall follow an active investment strategy which adopts a systematic approach to stock selection and portfolio construction. The approach allows the fund managers to respond proactively to changing market conditions and emerging opportunities.

The investible universe of the scheme is defined by the fund managers based on inputs from the investment team to limit investments into stocks of issuers based on their track record pertaining to governance, debt servicing, regulatory compliance or market perceptions and such other parameters.

The systematic approach involves utilising inputs from the fund managers and signal research scores shared by BlackRock Inc. Such signal research scores are derived using big data (which includes traditional data and alternative data), and leverages machine learning, a form of artificial intelligence and advanced data analytics, which are constantly being improved. Signals are selected based on their economic rationale and demonstrated statistical relevance.

The signals are consolidated into a composite research score, which is used in the portfolio construction process alongside other inputs from the investment team.

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The portfolio construction process is powered by BlackRock’s technology platform — Aladdin, which has been licensed to JioBlackRock AMC. This process is augmented by an optimisation process which leverages the composite research score along with other inputs from the investment team such as risk constraints, transaction cost, market liquidity, sector constraints and such other inputs.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

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