JioBlackRock's Big India Bet, Can AI Reshape Investing?

JioBlackRock Asset Management is positioning digital reach, systematic investing and data-led decision-making at the core of its India strategy. In an exclusive conversation with Sheryll D’Souza of The Free Press Journal, Chief Investment Officer Rishi Kohli discusses the company’s investment framework, use of alternative data and artificial intelligence, specialised investment funds, investor education initiatives and long-term expansion ambitions across India’s fast-evolving asset management industry.

What is the central idea behind the JioBlackRock joint venture?

BlackRock, the largest asset manager with assets under management approaching USD 15 trillion, views India as an opportunity. Jio contributes digital reach, sales capabilities and understanding of consumers, while BlackRockbrings investment expertise, technology and processes. We did not want to become merely another AMC. The objective is to introduce differentiated products, expand investor choice and advance financial inclusion across the country.

How important are smaller cities to this strategy?

Around 40 percent of our retail assets under management comes from B30 locations, or cities beyond the top 30. Younger investors there are digitally connected, financially aware and aspirational. Technology has improved information access, simplified onboarding and opened new fund offers to smaller towns. Investors increasingly want to build wealth rather than depend exclusively on deposits, property or gold.

Has India already won the systematic investment plan battle?

Considerable progress has been made, although participation remains below global averages. The next challenge is portfolio quality. Investors must align schemes with their goals and risk tolerance rather than chase recent performance. Diversification, asset allocation, risk-adjusted returns and long-term compounding need greater emphasis. Young investors respond well to clear data and logic.

How did you structure products for first-time investors?

We sequenced launches around an investor’s journey. Someone moving beyond a bank deposit may begin with an overnight, liquid or money-market fund, then consider index funds and an actively managed equity strategy. We subsequently added flexi-cap, sector-rotation and large-cap offerings. We have roughly 11.5 lakh retail investors; about 20 percent are investing in mutual funds for the first time.

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What makes systematic investing different from conventional fund management?

It uses defined rules to decide which shares to buy and how much weight to allocate. Our process examines valuation, quality, sentiment, earnings, momentum, price behaviour and alternative information. We assess about 400 data signals for every Indian stock, beyond an individual manager’s processing capacity. Human judgement remains essential during shocks, but machines optimise portfolios and control downside deviation. Managers can adjust permitted exposure bands as risks evolve.

Which alternative data can help generate alpha?

Job postings are useful. A sharp change in hiring can indicate that a company or sector is strengthening or weakening before it appears in quarterly earnings. Online sales can provide an early reading of consumer demand or a product launch. In our flexi-cap strategy, around 34 signals remain continuously active. An AI and machine-learning model combines the remaining signals into an additional indicator.

What safeguards prevent excessive dependence on artificial intelligence?

We do not accept a machine’s output blindly. Any apparent edge must have an understandable economic rationale. AI is useful for a finite, controlled set of signals, but unexplained factors can produce curve-fitting and unreliable results. BlackRock’s AI laboratory, supported by Stanford expertise, helps analyse specialised alternative data. The model supports judgement; it does not replace accountability.

Where do specialised investment funds fit in an investor’s portfolio?

SIFs sit between conventional mutual funds and higher-ticket portfolio management services or alternative investment funds. They require a minimum investment of Rs 10 lakh and permit sophisticated strategies, including limited short positions and derivatives, without leverage beyond prescribed gross exposure. The category has crossed Rs 25,000 crore in roughly ten months, with about 70 percent entering hybrid long-short strategies. These products can potentially fill the risk-return gap between fixed income and equities, but suitability is crucial. We emphasise risks, detailed disclosure and adviser involvement ahead of headline returns.

Was adding distributors a departure from the digital-first model?

No. We were always digital-first, not digital-only. The initial phase helped us understand investor cohorts and build digital capabilities. Distribution became relevant after several active launches and SIF approval. We initially worked with SIF-certified distributors while expanding our teams. Digital access and professional advice are complementary where products require suitability assessment.

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What is your outlook for JioBlackRock and India’s fund industry?

The industry could become at least three times its current size over the next decade. We already have 16 live funds and have launched at a pace exceeding one fund a month across passive, active, equity and fixed-income categories. We aim to broaden the product bouquet over the next one or two years, enter additional segments, expand through GIFT City and reach investors through multiple distribution channels. Our ambition is to become a significant industry participant while keeping investor education central to growth.