The aim is to give investors exposure to equity-like returns of between 5 per cent to 7 per cent each year, with a target volatility of 7 per cent.
The fund provides a low correlation to traditional equities by increasing portfolio diversification, and has the ability to invest in over 3,000 developed market companies covering the top slice of liquidity across 25 countries.
Richard Mathieson, head of Strategy in EMEA for BlackRock’s scientific active equity, said: “Globalisation has increased the extent to which macro forces influence company prospects and stock returns, while the digital age and advent of big data has given an exponential increase in the levels of information available.
“Our research-driven investment approach ensures that a strong emphasis on continual innovation is consistently built upon. We believe this is crucial for identifying the investment opportunities that exist in today’s global equity markets.”
The fund uses a process of systematic investing, allowing it to blend fundamental investment insight and technological expertise.
This ensures investment outcomes are achieved by capturing the information required to accurately forecast stock returns.
Investors are given exposure to equity-like returns, but with less volatility as net market exposure is minimised and managed.
The fund will be co-managed by Kevin Franklin, lead portfolio manager for global strategies within scientific equities at BlackRock, and Gearoid Neligan, who will both be supported by BlackRock’s scientific active equity team.
The fund is currently registered for sale in Sweden, Norway, Ireland, UK, Finland, Spain, France, Denmark, Germany, Netherlands, Austria, Belgium and Italy.
REACTIONS
PROVIDER VIEW
Alex Hoctor–Duncan, head of retail for EMEA at BlackRock, said: “There is an increase in demand from retail clients for absolute return funds which have the opportunity to deliver consistent returns without exposing investors to the vagaries of the stock market. We believe that, over time, the BlackRock Global Long/Short Equity Fund could be a cornerstone of many portfolios.”
ADVISER VIEW
Patrick Connolly head of communications at Bath-based Chase de Vere, said: “Long/short equity funds can provide good protection when stock markets are falling, so the timing of this launch could prove opportune with western markets, in some instances, rising in the past five years. BlackRock also have the resources to manage this type of fund effectively. However, investors should be wary of any fund which claims to produce equity-like returns but with less volatility.”
CHARGES
Annual management charge of 1.8 per cent.
VERDICT
Investors these days have a reduced opportunity set to secure attractive returns while limiting risk to their capital, Mr Mathieson said. The fund blends fundamental investment insight and technological expertise, which ensures accurate and quick forecasts of stock returns. The fund can provide good protection when stock markets are falling, however investors should be wary of the claims of equity-like yield but low volatility.
