BGF Global Enhanced Equity Yield Fund - Class A
Summary of Investment Objective
The Global Enhanced Equity Yield Fund seeks to generate a high level of income. The Fund invests globally, with no prescribed country or regional limits, at least 70% of its total assets in equity securities. The Fund makes use of derivatives in a way that is fundamental to its investment objective in order to generate additional income.
Fund Manager's Report (as at Jul 31, 2010)
The Fund underperformed its benchmark over the month.*
The options overlay was well managed in July, exceeding its benchmark for providing income while allowing investors to participate in price appreciation.
In July, management of the options delta allowed the Fund to participate in 91% of the price appreciation in the MSCI World Index during a very strong month. The value added was delivered through stock selection and peripheral risks were tightly controlled as we intend.
The Fund’s focus on dividend yield has a good probability to outperform the overall market as dividends are arguably the most reliable source of return in the current environment. While the market and the economy have recovered a great deal, there is still no shortage of uncertainty. This translates into higher implied volatility, which, in turn, translates into higher options premium to enhance yield with our options overlay.
*Reported Fund performance relative to its benchmark over the month was negatively affected by the timing differential between pricing of the Fund and its benchmark.
Fund Fact (as at Jul 31, 2010 )
| Status | Sub-Fund of Luxembourg SICAV |
| Fund Manager | Jon Clark |
| Launch Date | Oct 13, 2006 |
| Base Currency | USD ($) |
| Additional Dealing Currencies | EUR (€), SGD ($) |
| Benchmark | MSCI World (net) |
| Morningstar Sector | Equity Global |
| Total Fund Size (m) | USD ($) 241.3 |
| EUSD Fund Attributes | |
| EUSD Fund Status | out of scope |
| Fees | % |
| Annual Management Fee (A shares) | 1.50 |
| Initial Charge (A shares) | 5 |
| Codes | |
| ISIN | LU0265550359 |
| Bloomberg Equity Ticker - Benchmark | NDDUWI |
| Swiss Valoren Number | 2729822 |
| CUSIP | L1049H589 |
| Fund Risk Statistics | |||
|---|---|---|---|
| Name | 3 Years | 5 Years | Since Launch |
| Beta | 0.92 | - | 0.91 |
| Volatility (Annualised Standard Deviation) | |||
| Global Enhanced Equity Yield Fund | 21.5% | - | 19.5% |
| MSCI World (net) | 22.8% | - | 20.8% |
Risk Grading
Low
High
Non-distributing
Important Information
The information on this website is available to Qualified Investors and Professionals in some jurisdictions on a limited private placement basis subject to applicable laws and regulations in the country of distribution. The information is confidential and should not be reproduced or distributed to persons other than the recipient.
The investment objective stated above is a summary of the main objectives of the Fund. Please refer to the BGF prospectus for full details.
A limited range of BGF sub-funds have a distributor status A share class that seeks to comply with UK Distributor Status requirements. Please contact the Manager for more information.
The fund invests a large portion of assets which are denominated in other currencies; hence changes in the relevant exchange rate will affect the value of the investment. The fund may make distributions from capital as well as income or pursue certain investment strategies in order to generate income. Whilst this might allow more income to be distributed, it may also have the effect of reducing capital and the potential for long-term capital growth. Derivatives may be used substantially for complex investment strategies. These include the creation of short positions where the Investment Manager artificially sells an investment it does not physically own. Derivatives can also be used to generate exposure to investments greater than the net asset value of the fund. Investment Managers refer to this practice as obtaining leverage or gearing. As a result, a small positive or negative movement in stockmarkets will have a larger impact on the value of these derivatives than owning the physical investments. The use of covered call options in the fund will usually provide some limited protection to investors when stockmarkets are falling, but may also result in a lower return in a rising market, when compared to the benchmark. Investors in this Fund should understand that capital growth is not a priority and values may fluctuate and the level of income may vary from time to time and is not guaranteed. Past performance is not a guide to future performance and should not be the sole factor of consideration when selecting a product. All financial investments involve an element of risk. Therefore, the value of your investment and the income from it will vary and your initial investment amount cannot be guaranteed.
BlackRock Global Funds (BGF) is an open-ended investment company established in Luxembourg which is available for sale in certain jurisdictions only. BGF is not available for sale in the U.S. or to U.S. persons. Product information concerning BGF should not be published in the U.S. It is recognised under Section 264 of the Financial Services and Markets Act 2000. BlackRock Investment Management (UK) Limited is the UK distributor of BGF. 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 BGF sub-funds have a distributor status A sterling share class that seeks to comply with UK Distributor Status requirements. Subscriptions in BGF are valid only if made on the basis of the current Prospectus, the most recent financial reports and the Simplified Prospectus which are available on our website. Prospectuses, Simplified Prospectuses and application forms may not be available to investors in certain jurisdictions where the Fund in question has not been authorised.
Sources: Fund – BlackRock Investment Management (UK) Limited (BIM(UK)L), Indices - Datastream, BIM(UK)L. Quartiles - Standard & Poor's. BIM(UK)L Risk Grading: High Risk (on a scale of Low, Medium, Medium/High and High). This grading applies to Funds with emerging market, small capitalisation, or narrowly focused/concentrated equity mandates, which may restrict liquidity and increase the volatility of returns. It should only be used for comparison with other BlackRock Global Funds (BGF) and, in particular, should not be used in comparison with Funds not provided by BIM(UK)L. The grading is indicative of the level of risk of a particular Fund and is not supposed to be a guarantee of likely returns. If you are in any doubt as to the level of risk that you should take, you should seek Independent Advice. BIM(UK)L Risk Grading: Medium/High Risk (on a scale of Low, Medium, Medium/High and High). This grading applies to Funds which may be expected to have all, or at least a high proportion, of their assets invested in equities, or in bonds rated below investment grade. It should only be used for comparison with other BlackRock Global Funds (BGF) and, in particular, should not be used in comparison with Funds not provided by BIM(UK)L. The grading is indicative of the level of risk of a particular Fund and is not supposed to be a guarantee of likely returns. If you are in any doubt as to the level of risk that you should take, you should seek Independent Advice.Performance is shown as at Jul 31, 2010 in USD on a NAV price basis with income reinvested. Fund performance figures are calculated net of fees.