3 HABITS OF HIGHLY EFFECTIVE ‘ACTIVE’ INVESTORS

Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. You may not get back the amount originally invested.

BlackRock Portfolio Analysis and Solutions (BPAS)1 have helped over 600 European institutions2 in assessing and repositioning existing portfolios, and in building new propositions. Regulatory catalysts and the desire to stay competitive is driving discretionary managers, heads of advisory propositions, unit-linked and fund-of-fund managers alike to ask:

How do I adapt my processes to address the fact that my end investors want more for their money, amid greater scrutiny on the suitability of investments and on cost transparency?

We believe a complex and rapidly changing world demands a new approach to portfolio construction. We reflect on three habits that are shared by some of our most effective ‘active’ investors.

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new_appraoch
  • 1

    actively understand
    their portfolio

    Investors are increasingly shifting their processes from fund selection to holistic portfolio construction, with a strong emphasis on technology to inspect portfolio alignment with desired outcomes.

    Do you have a holistic multi-asset view of your portfolio?

  • 2

    actively identify and combine sources of return

    Investors are beginning to move past the out-dated dichotomy between ‘active or passive’. They understand the importance of differentiating sources of returns within their portfolios – blending index, factor and alpha-seeking strategies.

    Do you know the true drivers of returns in your portfolio?

  • 3

    actively use the whole
    investment toolbox

    With the expanding investment universe at their disposal, investors are shifting more attention towards greater indexing and a search for true alpha and alternatives.

    When was the last time you reviewed the products you use?

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WHY INDEX MORE?

Regulatory changes and the desire to stay competitive are driving distributors to search for more cost-efficient wrappers. Meanwhile, the ETF market in Europe has come of age and is maturing fast.

We explore how indexing is disrupting portfolio construction and helping investors become much more efficient.

SAVE TIME

Determining which managers can deliver true alpha is a task requiring significant time, skill and effort. Indexing helps to reduce the governance burden on continually searching for managers that can deliver true alpha.

MANAGE RISK

Often, investors can find that they are taking unintended risks within their portfolio, as a side effect of product selection choices. Indexing gives you more control of your portfolio, reducing the potential for misalignment and unintended risks.

CURB COSTS

A selection of the best managers does not always make the best portfolio. Indexing is not only about lowering overall portfolio costs, but about finding potentially more efficient ways to achieve similar outcomes.

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Navigating portfolio challenges

Dive into our client case studies and see how indexing could help you maximise the efficiency of risk and fee budget, reduce portfolio costs and focus on finding true alpha in select areas of your portfolio.

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BlackRock Portfolio Analysis and Solutions are a team of highly qualified investment consultants which seeks to provide industry leading tools, analysis and insights to empower our clients to make better investment decisions and gain new perspectives on portfolio construction.

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1BPAS (BlackRock Portfolio Analysis and Solutions) is a team of portfolio consultants which seeks to provide industry leading tools, analysis and insights for our clients. Through customised, outcome-orientated client engagements around portfolio construction and risk management, the team can assist clients with asset allocation, portfolio restructuring and implementation decisions.

2BlackRock Portfolio Analysis and Solutions, from January 2017 – December 2018.

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