BlackRock will use big data and machine learning in a new China A-share fund that has launched from its San Francisco office, where it is increasing its presence in an innovation push.
The long-only Ucits strategy will identify 300 companies from a universe of 1,300 Chinese companies in the Shanghai, Shenzhen and Hong Kong Exchange Stock Connect programme.
It will be managed by the Systematic Active Equity (SAE) team in San Francisco.
The fund has an estimated OCF of 1.2 per cent.
The asset manager this week announced head of Americas Mark McCombe is moving to the West Coast as it attempts to tap into innovation and technology.
Jeff Shen, co-chief investment officer of active equity and co-head of investments within SAE, leads the portfolio management team and will be supported by Rui Zhao, who is co-portfolio manager.
Shen argues says they have been managing the strategy for institutional investors for five years and look forward to opening it up to retail investors.
“We’ve been applying systematic investment methods to equity markets for over thirty years and more recently, we’ve been researching and applying new methods – big data, machine learning and artificial intelligence – to our models.
“We find these insights have extraordinary relevance in a market like China where data is quite often available and the market is large and complex.”
Head of Emea retail Michael Gruener says onshore Chinese companies have been an untapped market.
“China is one of the largest stock markets in the world, but due to restrictions on ownership, foreign investors have had very little exposure to Chinese domestic equities. Now, with access to onshore Chinese companies through the recently opened Stock Connect programme.”