EquitiesMay 3 2013

BlackRock outlines equity income focus

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Alex Hoctor-Duncan has outlined BlackRock’s strategic plans in the UK retail market, saying the firm is set to ramp up its focus on equity income.

The group’s Europe, Middle East and Africa retail head said the world’s biggest asset manager was banking on equities to dominate investors’ focus in the next few years with traditional investments such as cash and government bonds unable to generate the long-term returns and income investors need as they live longer.

The asset manager has a large range of equity income funds offshore in Luxembourg that are soon to reach their three year anniversaries and Mr Hoctor-Duncan is banking on those funds to drive the firm’s proposition forward.

The onshore range has only the £627m UK Income fund as a flagship equity income product and its co-manager Nick McLeod-Clarke has recently left to go on sick leave.

The firm also launched the £86m Continental European Income fund and the £68.9m Global Income fund in May 2011 and the £85.5m North American Income investment trust in October 2012.

BlackRock is also embarking on a drive to more outcome-orientated investing, rather than focusing on relative performance against a peer group or index.

As part of its focus on equity income and outcome-oriented investing as the solution for long-term retirement plans, BlackRock has launched an adviser toolkit that combines “educational material for use with clients, along with insights into markets, investor behaviour and a number of potential fund solutions”.

Mr Hoctor-Duncan said: “There is a huge disconnect between what people need to save and what they think they need, and the big challenge for us is to how do you make living longer work for you.”

BlackRock said that the current approach that many investors have could be misaligned with their long-term goals and the toolkit is designed to raise awareness of that problem.