Jio BlackRock Flexi Cap Fund to be powered by Aladdin: Everything you need to know

The first active fund of Jio BlackRock AMC will also use BlackRock's Aladdin technology for portfolio construction.

Unlike the five Jio BlackRock index funds that will passively try to replicate the performance of their respective indices, the Jio BlackRock Flexi Cap Fund will be an active equity scheme investing across large-cap, mid-cap, and small-cap stocks.

Let's understand the key details of the Jio BlackRock Flexi Cap Fund as per the draft paper filed by the AMC with SEBI:

Where will Jio BlackRock Flexi Cap Fund invest?

The investment objective of the Jio BlackRock Flexi Cap Fund is to generate long-term capital appreciation by investing in equity and equity-related instruments across market capitalisation

However, there is no assurance that the investment objective of the scheme will be achieved.

The asset allocation of the fund will be as follows:

• Equity and Equity-related instruments: 65% to 100%
• Debt and Money Market Instruments: Up to 35%
• Units of REITs and InvITs: Up to 10%

Jio BlackRock Flexi Cap Fund will, however, not invest in overseas securities.

Jio BlackRock Flexi Cap Fund: Investment strategy

The scheme will aim to generate long-term capital appreciation by investing in equity and equity-related instruments across market capitalisations.

"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 draft paper said.

The systematic approach will also use inputs from fund managers and signal research scores shared by BlackRock Inc.

The systematic approach involves utilizing 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," the draft said.

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

"The portfolio construction process is powered by BlackRock's technology platform - Aladdin, which has been licensed to JioBlackRock AMC" the draft said.

However, the final investment decisions will continue to rest with the fund managers.