Fund selectors are divided on whether other providers will follow BlackRock's lead by venturing into the quantitative investment space, suggesting they could be attracted by cost efficiencies but deterred by investor scepticism towards these strategies.
BlackRock, the world's largest asset manager, announced last month it would shift a number of its actively-managed equity products into quantitative strategies.
The shake-up, which the group said will affect some $30bn of AUM (11% of the group's total active equity business), comes after a six-month review of its offering.
While the move is set to create annualised savings of $30m for clients due to lower fees, a number of fund managers will be made redundant, including some running funds sold in the UK.
Commenting on the changes, Larry Fink, chairman and CEO of BlackRock, said: "We are acting now to leverage our unique business model to lay the foundation for what we believe will be the future of active equity management."
However, although industry commentators have said the restructure is a way for the firm to address performance issues and take on the passives challenge, they add quant approaches still have a lot to prove, especially at inflection points in markets.
Ruli Viljoen, head of manager selection at Morningstar Investment Management Europe, said BlackRock's strong top-down views may have resulted in "wholesale underperformance across the board", which led the group to take this step.
However, she warned quantitative strategies also come with their own performance risks.
"They typically underperform at inflection points. We have been in a market that has been a one-way bet for a long time now where we have had low interest rates, which has made it tough for active funds," she said.
"If rates rise, we may see an inflection point so quant products could underperform and that will make investors even more wary. I do not think other fund groups will follow suit."
Jason Broomer, head of investment at Square Mile, agrees quantitative funds "trip over at inflection points in markets", adding it will be interesting to see how BlackRock differentiates the new range from its smart-beta ETFs.
"I assume one of the reasons for this move is to reduce fees but investors will need to do their research to see if they will actually end up saving anything," he said.
"I would be surprised to see this become a developing trend. There are not many other groups that have the quant capabilities to get something like this going."
But some fund selectors think the move to quant-based strategies could become more popular in the coming years, predominantly in the US but also in the UK market.
Some groups have already expressed an interest in promoting their quant capabilities. These include Aberdeen AM, with CEO Martin Gilbert saying recently he can "see a place for both human and computer-led investing".
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