Summary of Investment Objective
The Pacific Equity Fund seeks to maximise total return. The Fund invests at least 70% of its total assets in the equity securities of companies domiciled in, or exercising the predominant part of their economic activity in the Asia Pacific region. Currency exposure is flexibly managed.
Fund Manager's Report (as at Jul 31, 2010)
The Fund underperformed its benchmark over the month. Whilst the allocation effect across sectors and countries was broadly neutral, stock selection detracted, particularly within technology and energy. Within technology, Nintendo weakened on the sluggish earnings release due to stronger yen and weak game console sales while Japanese petroleum and natural gas explorer Inpex declined on the announcement of a dilutive equity issuance. Chinese property stocks rallied in response to the government's annoucement that RMB60bn would be spent on low-cost housing in the country's western provinces. The fund's holdings in China Vanke added value.
We took Japan to a marginal underweight, selling out of Seven & I Holdings and Sumitomo Mitsui Financial Group. We established a new position in telecom China Unicom which we expect to expand its subscriber base at the expense of its rivals in H2 2010, based on new competitively-priced packages. We also added underperforming Hong Kong’s commercial landlord Wharf. The stock has lagged due to its China exposure and we believe sentiment here is too pessimistic. The earnings outlook looks solid on the back of mainland spending.
Investor sentiment is likely to remain fragile in the short-term due to the loss of momentum in global economic growth and the probability of negative earnings revisions. Chinese policy also remains a key factor and we perceive a slight move to a pro-growth stance as inflation worries recede. Hong Kong/China is our largest geographical overweight at the end of July, augmented by a position in Australia. The latter’s market and currency is increasingly driven by developments in China. Within Hong Kong, we are playing consumer discretionaries, which are at far more reasonable valuations than their mainland counterparts.We are heavily underweight ASEAN, which has already outperformed over the year to date. Valuations are not compelling and we are finding more attractive opportunities elsewhere.
Fund Fact (as at Jul 31, 2010 )
| Status | Sub-Fund of Luxembourg SICAV |
| Fund Manager | Nick Scott/Rob Weatherston |
| Launch Date | Aug 5, 1994 |
| Base Currency | USD ($) |
| Additional Dealing Currencies | EUR (€), GBP (£) |
| Benchmark | Composite (BGF Pacific) net |
| Morningstar Sector | Equity Asia Pacific |
| Total Fund Size (m) | USD ($) 157.5 |
| EUSD Fund Attributes | |
| EUSD Fund Status | out of scope |
| Fees | % |
| Annual Management Fee (A shares) | 1.50 |
| Initial Charge (A shares) | 5 |
| Codes | |
| ISIN | LU0035112944 |
| Bloomberg Equity Ticker | MERPEAI LX |
| Reuters Page Id | BLRKIT |
| Swiss Valoren Number | 600355 |
| CUSIP | L1049K483 |
| Research Ratings | |
| Morningstar Qualitative Rating | Standard |
| Fund Risk Statistics | |||
|---|---|---|---|
| Name | 3 Years | 5 Years | Since Launch |
| Beta | 1.03 | 1.02 | 0.93 |
| Volatility (Annualised Standard Deviation) | |||
| Pacific Equity Fund | 25.1% | 20.9% | 19.5% |
| MSCI AC Asia Pacific net | 24.1% | 20.2% | 18.7% |
Risk Grading
Low
High
Non-distributing
Important Information
‡ Synthetic benchmark based on MSCI Pacific sub-components, with following fixed country weightings (68% Japan; 10% Hong Kong; 10% Australia; 6% Taiwan; 2% India; 2% Singapore; 2% South Korea). MSCI Pacific Index shown for illustrative purposes.
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. 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.