BGF Flexible Multi-Asset Fund - Class A
Summary of Investment Objective
The Flexible Multi-Asset Fund follows an asset allocation policy that seeks to maximise total return.The Fund invests globally in the full spectrum of permitted investments including equities,fixed income transferable securities (which may include some high yield fixed income transferable securities),units of undertakings for collective investment,cash,deposits and money market instruments.The Fund has a flexible approach to asset allocation (which includes taking indirect exposure to commodities through permitted investments, principally through derivatives on commodity indices and exchange traded funds).The Fund may invest without limitation in securities denominated in currencies other than the reference currency (euro).The currency exposure of the Fund is flexibly managed.
Fund Manager's Report (as at Jul 31, 2010)
The portfolio delivered a return of 0.6% in July, underperforming its benchmark, although relative performance was negatively impacted by the timing differential of the Fund's valuation point and that of the benchmark.
A strong month for risk assets saw markets rallying on better-than-expected earnings data and positive stress test results from European banks. Fixed Income indices were also positive, with 10-year Gilts and US Treasuries the top performers within government bond markets. Elsewhere, evidence suggests investors are turning to higher yielding/junk bonds in an attempt to obtain yield in a potentially prolonged low rate environment.
Cyclically sensitive commodities also outperformed, as oil prices rose over 4% and agriculture prices advanced as drought conditions in Russia resulted in a strong supply disruption in grains.
The Fund's performance was supported by our slight overweight exposure to equities and other risk assets, such as dividend futures. We recently added to existing positions after the sell-off in the second quarter provided a good opportunity to add to these attractively valued assets.
Within our tactical positions, the Indonesia equity position was a positive contributor, benefiting from strong fundamentals and improving risk appetite. Underlying manager alpha was strong from the global equity portfolio. Negative contributors came form our holding in the Brevan Howard Macro Fund and overweight exposure to the US dollar.
We retained a modest overweight within our equity allocation, reflecting our positive view on the short-term drivers of equities. Within our tactical allocations we took profits on a small position in the Chinese equity market.
In terms of our macro-economic outlook, we believe that a double-dip into a global recession is unlikely and that the most likely outcome is a prolonged period of sluggish but positive growth. We observe that all major regions are slowing and the world remains two paced: with emerging markets growing at high single-digit rates, and the US and Europe weaker.
We remain broadly positive on equities, and have identified opportunities in technology and healthcare at the sector level, as well as selective emerging markets, such as Latin America and Russia.
Within fixed income, we believe government bonds look expensive, despite economic releases being largely mixed and offering short-term support. We continue to prefer investment-grade corporate bonds and have become increasingly positive on high yield.
Fund Fact (as at Jul 31, 2010 )
| Status | Sub-Fund of Luxembourg SICAV |
| Fund Manager | Andy Warwick |
| Launch Date | Jan 4, 1999 |
| Base Currency | EUR (€) |
| Additional Dealing Currencies | USD ($) |
| Benchmark | Composite (MSCIW/CWGBI) |
| Morningstar Sector | Asset Allocation Global Neutral (EURO) |
| Total Fund Size (m) | EUR (€) 82.0 |
| EUSD Fund Attributes | |
| EUSD Fund Status | in scope, distributions and redemptions |
| Information Source | Portfolio Composition |
| Application Threshold | >40% |
| Holding in Debt Claims | 55.12% |
| Grandfathered Bonds Held | 0.32% |
| Application Start Date | Jan 1, 2010 |
| Application End Date | Dec 31, 2010 |
| TID | 0.000000000 |
| Last Distribution Date | Aug 19, 2010 |
| Fees | % |
| Annual Management Fee (A shares) | 1.50 |
| Initial Charge (A shares) | 5 |
| Codes | |
| ISIN | LU0093503497 |
| Bloomberg Equity Ticker | MEREGBI LX |
| Reuters Page Id | BLRKIB |
| Swiss Valoren Number | 995910 |
| CUSIP | L1049K681 |
| Fund Risk Statistics | |||
|---|---|---|---|
| Name | 3 Years | 5 Years | Since Launch |
| Beta | 1.21 | 1.19 | 0.99 |
| Volatility (Annualised Standard Deviation) | |||
| Flexible Multi-Asset Fund | 11.5% | 9.5% | 10.2% |
| Composite (MSCIW/CWGBI) | 8.2% | 6.9% | 9.4% |
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. 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 Risk (on a scale of Low, Medium, Medium/High and High). This grading applies to Funds with exposure to capital market risk but where any equity exposure is balanced by exposure to high-quality bonds. 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 EUR on a NAV price basis with income reinvested. Fund performance figures are calculated net of fees.