BlackRock Managed Index Portfolios

Size: px

Start display at page:

Download "BlackRock Managed Index Portfolios"

Blake Morgan
6 years ago
Views:

1 BlackRock Managed Index Portfolios BlackRock Strategic Funds (BSF)

2 What are BlackRock Managed Index Portfolios? BlackRock Managed Index Portfolios (BMIPs) are all-in-one, core portfolios that consist 100% of low cost UCITS ishares ETFs and BlackRock Index Funds in a mutual fund structure. Made up of passive building blocks, BMIPs are actively managed and draw on the expertise of BlackRock s robust risk management platform, Aladdin. 2 BLACKROCK MANAGED INDEX PORTFOLIOS

3 Multi-asset portfolios Risk categories What s inside 4 6 Portfolio overview Investment process 7 8 Best of BlackRock Key benefits 9 10 BLACKROCK STRATEGIC FUNDS 3

4 Dynamic suite of multi-asset portfolios BlackRock Managed Index Portfolios are a range of diversified multi-asset funds based on three risk categories: defensive, moderate and growth. With increasing risks in changing markets and the potential for inflation to erode the real value of all investments, building robust multi-asset funds requires more than traditional asset allocation. With this in mind, BlackRock has created a dynamic suite of multi-asset portfolios leveraging its quantitative approach to portfolio construction and deep expertise in managing multi-asset strategies. The range aims to maximise returns and reduce risk within certain risk categories in line with regulatory defined SRRI* risk profiles. All three funds are actively managed and benefit from the full capabilities of BlackRock s portfolio construction and risk management expertise, global investment strategy and research insights. * SRRI (a key feature of the Key Investor Information Document (KIID) stands for Synthetic Risk Reward Indicator, which is a measure of the overall risk and reward profile of a fund. Funds are categorised on a scale from 1 to 7, with 1 being lowest risk and 7 being highest risk. Typically, the SRRI is derived from the volatility of past returns over a 5-year period. The SRRI for each BlackRock Management Index Portfolio may vary however, each fund aims to maintain its volatility within the targeted risk band. 4 BLACKROCK MANAGED INDEX PORTFOLIOS

5 To provide full transparency and increased diversification as part of a liquid, cost-effective solution, BlackRock Managed Index Portfolios are built using ETFs and index funds as low cost building blocks allowing investors to access BlackRock s best thinking and keep more of what they earn. BlackRock Managed Index Portfolios offer investors the opportunity to gain access to BlackRock s best thinking in a diversified and transparent form. The funds investment proposition centers around three key pillars Robust risk management BlackRock Managed Index Portfolios Low cost building blocks Active asset allocation BLACKROCK STRATEGIC FUNDS 5

6 BlackRock Managed Index Portfolios are available in three risk categories Defensive fund Asset class Allocation* Fixed income 81.40% Developed equities 15.10% Emerging equities 2.60% Non-traditional 0.90% SRRI risk profile* Lower risk Typically lower rewards Higher risk Typically higher reward Moderate fund Asset class Allocation* Fixed income 43.90% Developed equities 46.60% Emerging equities 7.50% Non-traditional 2.00% SRRI risk profile* Lower risk Typically lower rewards Higher risk Typically higher reward Growth fund Asset class Allocation* Fixed income 15.40% Developed equities 69.40% Emerging equities 11.20% Non-traditional 4.00% SRRI risk profile* Lower risk Typically lower rewards Higher risk Typically higher reward * As of July 13, BlackRock Managed Index Portfolios are rebalanced once a month. 6 BLACKROCK MANAGED INDEX PORTFOLIOS

7 BlackRock Managed Index Portfolios overview Fund Defensive Moderate Growth Risk band 1 2%-5% 5%-10% 10%-15% Time horizon Long term diversified asset allocation Additional tactical positions Long term diversified asset allocation Additional tactical positions Long term diversified asset allocation Additional tactical positions Exposure Long Only Diversified across major asset classes and over 7,500 underlying securities Long Only Diversified across major asset classes and over 7,500 underlying securities Long Only Diversified across major asset classes and over 8,000 underlying securities Currency share classes USD (Hedged) 2 USD (Hedged) 2 USD (Hedged) 2 Total Expense Ratio (TER) (A Share Class- 1.13% 1.13% 1.15% Accumulating) 3 Total Expense Ratio (TER) (D Share Class- 0.52% 0.53% 0.52% Accumulating) 3 Annual management fee (A Share Class) Annual management fee (D Share Class) 1.00% 1.00% 1.00% 0.37% 0.37% 0.37% As of June To determine the risk bank, the SRRI is used. SRRI (a key feature of the Key Investor Information Document (KIID) stands for Synthetic Risk Reward Indicator, which is a measure of the overall risk and reward profile of a fund. Funds are categorised on a scale from 1 to 7, with 1 being lowest risk and 7 being highest risk. Typically, the SRRI is derived from the volatility of past returns over a 5-year period. The SRRI for each BlackRock Management Index Portfolio may vary however, each fund aims to maintain its volatility within the targeted risk band. SRRI risk band as at 10 April The underlying portfolio exposures are global in nature, optimised from the Funds EUR base currency perspective. USD/EUR currency risk between the Funds base currency (EUR) and USD is hedged. 3 TER data points are taken from accumulating share classes (A2, D2). BLACKROCK STRATEGIC FUNDS 7

8 What is the investment process? There are three key parts to the BlackRock Managed Index Portfolios investment process Enhanced strategic asset allocation When building the BlackRock Managed Index Portfolios, the investment team moves beyond traditional static asset allocation, which is based solely on average historical asset class returns. Instead, the team s asset allocation between equities, fixed income and non-traditional exposures aims to be market aware and incorporates forward-looking estimates to make considered assumptions on expected risk and return, in addition to assessing historical asset class returns. This approach leverages BlackRock s proprietary research into understanding how expected asset class returns are based on key risk premia (greater expected return compared to cash over time). Tactical positioning While asset allocation drives the mix between asset classes in the funds over time, the investment team makes use of tactical positioning within asset classes over the short term as well. This tactical positioning is based on BlackRock s global multi-asset research and its proprietary systematic approach in order to identify opportunities across equity regions, countries and sectors, as well as fixed income rates, credit and emerging markets. Thematic views The funds leverage the firm s global investment strategy and thematic research including insights from the BlackRock Investment Institute (BII). 8 BLACKROCK MANAGED INDEX PORTFOLIOS

Who manages the BlackRock Managed Index Portfolios?

Managed Index Portfolios are managed within BlackRock s Multi- Asset Strategies Group

the disciplined, objective investment process of the dedicated investment team.

Downing, PhD CFA CAIA BlackRock Managed Index Portfolios offer investors the best of

9 Who manages the BlackRock Managed Index Portfolios? Drawing on the wide range of investment expertise across BlackRock, the BlackRock Managed Index Portfolios are managed within BlackRock s Multi- Asset Strategies Group and benefit from combining the insights of the global investment strategy team with the disciplined, objective investment process of the dedicated investment team. Investment leadership Christopher Michael Gates, Anthony Chan, Stephen Walker Downing, PhD CFA CAIA BlackRock Managed Index Portfolios offer investors the best of BlackRock by leveraging the firm s world-class investment strategy, portfolio construction and trading expertise. BLACKROCK STRATEGIC FUNDS 9

10 Why use BlackRock Managed Index Portfolios? Active asset allocation BlackRock Managed Index Portfolios (BMIPs) are actively managed funds of ETFs (Exchange Traded Funds) and index funds that benefit from a wide range of investment expertise across BlackRock. Incorporating both longer term strategic views and more timely tactical opportunities, the funds keep transaction costs low by relying on a systematic process that minimises turnover while staying nimble enough to adapt to market conditions. Broad diversification BlackRock Managed Index Portfolios provide investors with a global multi- asset solution. Through their enhanced strategic asset allocation, BMIPs are diversified across major asset classes and over 7,500 underlying securities 4. The level of diversification across asset classes is intended to strike a balance between capturing the potential risk and the return benefits for each of the three risk profiles. BlackRock Managed Index Portfolios draw on the expertise of BlackRock s world class risk management system, Aladdin, for the provision of risk management expertise. This combines proprietary risk management technology, including extensive analytics, with a deep understanding of financial markets and investment processes, in order to examine and understand the risks involved when making investment choices. 4 Source: BlackRock as of June BLACKROCK MANAGED INDEX PORTFOLIOS

11 $ Low cost building blocks BlackRock Managed Index Portfolios offer investors access to a diversified and cost-effective multi-asset solution, utilising both ETFs and index funds to implement their asset allocation. ETFs are investment funds traded on a stock exchange which can offer efficient and transparent access to markets and, as passive funds, they seek to return the same performance as a specified index, minus fees. ETFs generally have lower fees than active funds. Index funds are mutual funds designed to match the underlying components of a benchmark index. As passive mutual funds, they seek to replicate the performance of their specified benchmark, minus fees. Similar to ETFs, index funds generally have lower fees than active funds. Long-term investments BlackRock Managed Index Portfolios reflect an investment strategy that may be considered by investors with a long-term investment horizon (at least five years, but typically greater than 10 years). As a result, the funds allocations might remain fixed over short periods of time. However, the allocations are not static and get reviewed on an ongoing basis which allows recent market conditions to be considered when rebalancing the allocations. BLACKROCK STRATEGIC FUNDS 11

12 In Latin America & Iberia, for Institutional Investors and Financial Intermediaries only (Not for public distribution). This material is for educational purposes only and does not constitute an offer or solicitation to sell or a solicitation of an offer to buy any shares of any fund (nor shall any such shares be offered or sold to any person) in any jurisdiction in which an offer, solicitation, purchase or sale would be unlawful under the securities law of that jurisdiction. It is possible that some or all of the funds mentioned in this document have not been registered with the securities regulator of Argentina, Brazil, Chile, Colombia, Mexico, Panama, Peru, Portugal, Spain, Uruguay or any other securities regulator in any Latin American country and thus might not be publicly offered within any such country, except for Chile where certain funds have been registered with the Superintendencia de Valores y Seguros (or SVS) for public offering and in Mexico where certain funds have been listed on the Sistema Internacional de Cotizaciones (SIC) exchange of the Bolsa Mexicana de Valores. The securities regulators of such countries have not confirmed the accuracy of any information contained herein. No information discussed herein can be provided to the general public in Latin America. In Iberia, this material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any financial instrument or product or to adopt any investment strategy. Certain funds mentioned here are registered for distribution in Spain. Additionally, certain funds are registered for distribution in Portugal. In Spain, the BlackRock Global Funds (BGF) are registered with the number 140 in the Comisión Nacional del Mercado de Valores de España (CNMV), the BlackRock Strategic Funds (BSF) are registered with the number 626 with the CNMV, and the Prospectus for each registered fund has been registered with the CNMV. In Portugal, certain share classes of certain BGF and BSF funds are registered with the Comissão do Mercado de Valores Mobiliários (CMVM) and the Prospectus for each registered fund has been registered with the CMVM. No securities regulator in any country within Andorra, Spain or Portugal has confirmed the accuracy of any information contained herein. This document contains BlackRock Inc. products or services that might be offered directly or indirectly within the Andorran jurisdiction, and it should not be regarded as solicitation of business in any jurisdiction including the Principality of Andorra. In Chile, the offer of each security not registered with the SVS began on the date as indicated for such fund as described herein and the offer of such securities is subject to General Rule No. 336 issued by the SVS. The subject matter of this offer may include securities not registered with the SVS; therefore, such securities are not subject to the supervision of the SVS. Since the securities are not registered in Chile, there is no obligation of the issuer to make publicly available information about the securities in Chile. The securities shall not be subject to public offering in Chile unless registered with the relevant registry of the SVS. In Colombia, the offer of each Fund is addressed to less than one hundred specifically identified investors, and such Fund may not be promoted or marketed in Colombia or to Colombian residents unless such promotion and marketing is made in compliance with Decree 2555 of 2010 and other applicable rules and regulations related to the promotion of foreign financial and/or securities related products or services in Colombia. In Peru, this material is for the sole use of Institutional Investors, as such term is defined by the Superintendencia de Banca, Seguros y AFP. Regulator information: BlackRock Advisors (UK) Limited, which is authorized and regulated by the Financial Conduct Authority ( FCA ), having its registered office at 12 Throgmorton Avenue, London, EC2N 2DL, England, Tel +44 (0) , has issued this document for access by Professional Clients only and no other person should rely upon the information contained within it. BlackRock Strategic Funds (BSF) is an investment management company established in Luxembourg and whose distribution efforts are authorized to be done only in some jurisdictions. BSF is not authorized to distribute products in the United States or to U.S. Persons. Information pertaining BSF products must not be published in the U.S. Fund specific risks: The BlackRock Managed Index Portfolios (the Funds ) are sub-funds of BlackRock Strategic Funds (BSF). BSF is an open-ended investment company established in Luxembourg which is available for sale in certain jurisdictions only. BSF is not available for sale in the U.S. or to U.S. persons. Product information concerning BSF should not be published in the U.S. BSF is recognised under Section 264 of the Financial Services and Markets Act BlackRock Investment Management (UK) Limited is the UK distributor of BSF. Most of the protections provided by the UK regulatory system, and the compensation under the Financial Services Compensation Scheme, will not be available. A limited range of BSF sub-funds have a reporting fund status A sterling share class that seeks to comply with UK Reporting Fund Status requirements. Subscriptions in BSF are valid only if made on the basis of the current Prospectus, the most recent financial reports and the Key Investor Information Document (KIID), which are available on our website. Prospectuses, KIIDs and application forms may not be available to investors in certain jurisdictions where the Fund in question has not been authorised. The funds may have indirect exposure to fixed interest securities such as corporate or government bonds which pay a fixed or variable rate of interest (also known as the coupon ) and behave similarly to a loan. These securities are therefore exposed to changes in interest rates which will affect the value of any securities held. The funds may have indirect exposure to fixed interest securities issued by companies which, compared to bonds issued or guaranteed by governments, are exposed to greater risk of default in the repayment of the capital provided to the company or interest payments due to the fund. The BSF Fund of ishares range are fund of funds structures which may invest up to 100% of NAV in other collective investment schemes. Overseas investment will be affected by movements in currency exchange rates. Funds specific risks: Emerging markets are generally more sensitive to economic and political conditions than developed markets. Other factors include greater Liquidity Risk, restrictions on investment or transfer of assets and failed/delayed delivery of securities or payments to the Funds. Credit Risk: changes to interest rates and/or issuer defaults will have a significant impact on the performance of fixed income securities. Potential or actual credit rating downgrades may increase the level of perceived risk. Equities: the value of equities and equity-related securities can be affected by daily stock market movements. Other influential factors include political, economic news, company earnings and significant corporate events. Counterparty Risk: The insolvency of any institutions providing services such as safekeeping of assets or acting as counterparty to derivatives or other instruments, may expose the Funds to financial loss. Currency Risk: The Funds invests in other currencies. Changes in exchange rates will therefore affect the value of the investment. Past performance is not a guide to current or future performance. The value of investments and the income from them can fall as well as rise and is not guaranteed. You may not get back the amount originally invested. Changes in the rates of exchange between currencies may cause the value of investments to diminish or increase. Fluctuation may be particularly marked in the case of a higher volatility fund and the value of an investment may fall suddenly and substantially. Levels and basis of taxation may change from time to time. Any research in this document has been procured and may have been acted on by BlackRock for its own purpose. The results of such research are being made available only incidentally. The views expressed do not constitute investment or any other advice and are subject to change. They do not necessarily reflect the views of any company in the BlackRock Group or any part thereof and no assurances are made as to their accuracy. This document is for information purposes only and does not constitute an offer or invitation to anyone to invest in any BlackRock funds and has not been prepared in connection with any such offer BlackRock, Inc. All Rights reserved. BLACKROCK, BLACKROCK SOLUTIONS, ishares, BUILD ON BLACKROCK and SO WHAT DO I DO WITH MY MONEY are registered and unregistered trademarks of BlackRock, Inc. or its subsidiaries in the United States and elsewhere. All other trademarks are those of their respective owners. Prepared by BlackRock Investments, LLC, member of FINRA. Not FDIC Insured May Lose Value No Bank Guarantee

BSF USD High Yield Fixed Maturity Bond Fund

FOR PROFESSIONAL CLIENTS AND QUALIFIED INVESTORS ONLY FIXED MATURITY PORTFOLIO BSF USD High Yield Fixed Maturity Bond Fund A diversified fixed-term US high yield bond strategy tailored to provide attractive