JioBlackRock debuts first active equity fund with AI-driven flexi cap strategy; key takeaways for investors

JioBlackRock Mutual Fund has forayed into the active equity space with the launch of its maiden flexi cap fund — the JioBlackRock Flexi Cap Fund. The new scheme, which opened for subscription this week, will close on October 7 and reopen for continuous sale and repurchase within five business days of allotment.

Until now, JioBlackRock had focused exclusively on passive products, having rolled out eight index funds — four of them equity schemes tracking benchmarks like the Nifty 50, Nifty Next 50, Nifty Midcap 150, and Nifty Smallcap 250. The new flexi cap fund marks its first active offering and aims to differentiate itself through a blend of human expertise and artificial intelligence (AI).

A systematic, AI-driven approach

The JioBlackRock Flexi Cap Fund adopts an active investment strategy powered by a framework called Systematic Active Equity (SAE). This involves fund managers working alongside data-driven models and signal research scores provided by BlackRock Inc. These scores are derived from big data and alternative data sources, processed using machine learning and advanced analytics.

Signals are chosen based on their economic rationale and statistical relevance, grouped under four heads — Valuation (cheapness), Quality (business strength), Sentiment (market mood), and Fundamental Momentum (earnings and revenue growth). By integrating these insights, the fund managers can adjust allocations in response to changing market conditions.

In a post on social media platform X, the fund house explained: “By blending human expertise with AI, we aim to build smarter portfolios. JioBlackRock Flexi Cap Fund, powered by Systematic Active Equity, combines the insight of fund managers with data-driven signals to create a portfolio aiming for long-term growth. Investing, evolved.”

The fund’s portfolio construction will run on Aladdin, BlackRock’s proprietary risk and portfolio management platform used by global asset managers. This system incorporates inputs such as risk constraints, transaction costs, market liquidity, and sector exposure, while providing advanced analytics and optimization tools.

Features and flexibility

Like all flexi cap funds, the scheme has the freedom to invest across large-cap, mid-cap, and small-cap companies without restrictions. Under SEBI’s rules, flexi cap funds must maintain 65–100 per cent in equities, 0–35 per cent in debt, and can allocate up to 10 per cent to REITs (Real Estate Investment Trusts) and InvITs (Infrastructure Investment Trusts). Both instruments provide regular income streams and market-linked growth, offering diversification benefits.

A notable feature of the fund is its zero exit load — a rarity in the mutual fund industry. Most schemes levy 1 per cent if investors redeem early, adding to short-term capital gains (STCG) taxes. By waiving exit loads, JioBlackRock becomes only the second flexi cap fund after Navi to offer this investor-friendly feature.

However, unlike some peers such as Parag Parikh Flexi Cap, JioBlackRock’s scheme will not invest overseas. Its portfolio will remain entirely focused on Indian equities, debt, and domestic REITs/InvITs.

A bet on technology and behaviour

The fund house believes systematic investing can help overcome behavioral biases that often cloud human judgment. “Systematic investing combines human knowledge, experience, and creativity with the efficiency of machines,” it said in a statement, adding that digitization, big data, and AI are shaping the future of investment strategies.

The underlying proposition is simple: AI acts as a tireless research assistant, scanning vast volumes of financial data, earnings transcripts, analyst notes, and even social media chatter, to highlight opportunities. Fund managers then apply judgment, risk oversight, and market understanding to finalize positions.

The road ahead

The JioBlackRock Flexi Cap Fund enters one of the most competitive categories in the Indian mutual fund industry. Flexi cap funds have historically been popular with investors due to their ability to navigate across market capitalizations and cycles.

With BlackRock’s global expertise, the Aladdin platform’s analytical power, and the Reliance-backed Jio Financial ecosystem, the fund aims to stand apart through its technology-driven investment strategy.

That said, whether AI-powered portfolio construction will deliver consistent outperformance in Indian markets remains to be seen. For now, the launch signals JioBlackRock’s intent to expand beyond passive strategies and establish a stronger foothold in India’s growing active fund management space.