InvestmentsAug 19 2016

Fund review: BlackRock Strategic Global Bond

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Fund review: BlackRock Strategic Global Bond

The latest addition to its expanding fund portfolio, BlackRock has launched a fixed income fund looking to invest in global macroeconomic strategies with exposure to regions where the group believes interest rates are “attractive” and markets have a supportive monetary policy.

The BlackRock Global Funds (BGF) Strategic Global Bond fund is an actively managed multi-currency fund with a focus on delivering alpha via macroeconomic -driven fixed income opportunities including rates and foreign exchange markets across both emerging and developed markets.

The fund looks to invest at least 70 per cent of its total assets in fixed income securities.

The annual management charge of the fund’s D share class is 0.50 per cent and the ongoing charge fee is 0.70 per cent.

www.blackrock.com

Comment

Many challenges remain for investors looking to seek income using global bonds. But there are still plenty of funds available to choose from – despite a tricky background.

One of the issues with global bonds can be liquidity. It is a concern for investors, regardless of asset class – BlackRock says it has launched this in response. The management team – which will consist of five members – will be using their own comprehensive risk management approach and will assess roughly 4,000 unique risk factors, which should put many investors’ minds at ease that it has been researched in depth.

The fund, which will use two indices for benchmarks – the Barclays Global Aggregate index (unhedged), seen in Chart 1, will be used for 80 per cent of the fund while the remaining 20 per cent will be against emerging markets.

The group believes highly accommodative monetary policy around the world has artificially boosted global bond markets with yields on higher quality bonds continuing to decline. This fund has been launched because BlackRock believes there are opportunities for active managers to identify sources of added value by capitalising on global opportunities and macroeconomic trends – something it looks set to do.