WSJ: A Quant Program Is the Reason You Just Bought That ETF

By Sarah Krouse

At the exact moment a mom-and-pop investor considers buying bank stocks, an advertisement pops up on their desktop promoting a financials-focused fund.

The scenario isn’t science fiction, it is BlackRock Inc.’s latest business plan.

The world’s largest money manager with $5.4 trillion under management is developing a new advertising system that uses sentiment analysis from messages on Twitter Inc. and other data to help determine when to advertise specific funds in its vast lineup of exchange-traded funds.

The effort, a partnership with advertising firm WPP PLC, is the latest example of fund firms experimenting with new ways to attract cash in an increasingly competitive market for low-cost index-tracking funds. It shifts the use of computer programs beyond investing to using algorithms to woo retail investors.

“The same value we get on the investing side from big data and algorithms and looking at trends and responding to them — we’d like to do that on the advertising side,” said Jennifer Grancio, head of global business development at BlackRock’s iShares ETF business.

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