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Rekenthaler Report

BlackRock Sends in the Clones

Implications of the company’s decision to remove some of its active stock-fund managers.

You've Been Automated!
The news that BlackRock sidelined seven of its equity-fund managers didn’t make many front pages, but within the small world of professional money management it was a big story indeed. The world’s largest investment manager--Vanguard is the leading mutual fund company both in the United States and globally, but BlackRock runs more assets in all forms--swapped living, breathing people for stock-picking models. Fear the rise of the machines.

Said BlackRock CEO Larry Fink, “The democratization of information has made it much harder for active management. We have to change the ecosystem--that means relying more on big data, artificial intelligence, factors, and models within quant and traditional investment strategies.”