BlackRock has written to investors in its Balanced Income Portfolio fund, proposing to change its investment objective, scope and name to the Global Multi-Asset Income fund and if accepted the changes will take place in January.
The fund was first launched in 1994 and repositioned in late 2006, giving exposure to global markets but with an emphasis on the UK.
Tony Stenning, head of UK retail sales at BlackRock, explained to FTAdviser that “the world has moved on” and the manager wants to give more flexibility in terms of investment strategy.
The move is a complete replication of the existing global multi-asset income strategy that has been “successful” in the US, via an equally successful offshore fund in BlackRock’s Luxembourg range.
The change will be put to an investor vote in December and should it be successful the changes will become effective on 12 January.
Mr Stenning emphasised that the move is based on customer demand for “consistent income, rather than occasional brilliance” and as such the new strategy will target income of between 4 to 6 per cent per annum, based on the US fund averaging around 5.4 per cent per annum since launch.
In terms of asset allocation the fund consists of a global portfolio of bonds, equities, residual cash for investment purposes, derivatives for efficient portfolio management, as well as listed property and other alternatives within the Ucits structure.
“The client message consistently ‘what do I do with my money?’ as they can’t get income from traditional sources, bonds have been crushed by the perpetual search for yield, equities can produce and income but there’s obviously volatility in a single asset class, so this aims to be the best of both worlds.”
He said it will be helpful for advisers “particularly around income planning with clients that living longer, you need some way to get income in a consistent format to help plan for life’s unexpected events”.
Last week BlackRock launched an interactive tool for advisers to help clients save for life’s ‘big moments’ by using its range of income funds.
