The world’s largest investment firm wants to help everyday investors think like quants.

BlackRock is now offering a free online tool that allows users to analyze 2,400 equity-mutual funds and ETFs through the lens of factors, or traits that data-driven traders rely on to drive returns. Factors include volatility, size and value.

With its Factor Box, BlackRock aims to illuminate investors about this increasingly popular strategy. The firm estimates that by 2022 the factor industry’s assets under management will expand to $3.4 trillion from $1.9 trillion in 2017.

BlackRock's Factor Box users can analyze 2,400 equity-mutual funds and ETFs through the the lens of factors. Bloomberg News


“This is a very fast-moving river,” said Andrew Ang, BlackRock’s head of factor-based strategies, at a press briefing on Wednesday. He added that while factors are far from a new investing phenomenon, “what’s new is to democratize them.”

First publicized by researchers in the 1960s, factor-based investing has proliferated recently through smart beta ETFs, which apply rules to create indexes of stocks based on traits like momentum or value. Assets of U.S.-listed smart beta ETFs have grown to over $709 billion, according to Bloomberg data.

Ang said Factor Box is a more comprehensive version of Morningstar’s Style Box — an investing tool that’s guided a generation of investors.

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Value funds with the best 3-year returns
While outpacing the S&P 500, the price tag is higher — the average expense ratio is more than 1%.

Users of BlackRock’s tool will need to buy into the firm’s definition of factors, which are not universally agreed upon. For instance, it doesn’t separate out sustainability as a factor, while some see ESG behavior as its own category.

Bloomberg News