Summary of Investment Objective
The US Basic Value 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 US. The Fund places particular emphasis on companies that are, in the opinion of the Investment Adviser, undervalued and therefore represent basic investment value.
Fund Manager's Report (as at Jul 31, 2010)
The Fund underperformed its benchmark over the month*.
We generated positive performance from stock selection within healthcare (underweighting Johnson & Johnson), energy (Halliburton, Peabody Energy) and financials (Morgan Stanley). Individual companies that contributed positively included Xerox, E.I. Du Pont de Nemours, Fluor and Deere. Additionally, our avoidance of Berkshire Hathaway and Procter & Gamble was beneficial. Stock selection detracted from performance within IT (LSI, International Business Machines) and telecommunication services (Verizon Communications). Individual companies that detracted included Raytheon, Travelers, General Mills, Exxon Mobil and underweighting Chevron. Additionally, lack of ownership of Anadarko Petroleum and Goldman Sachs hurt relative returns. In terms of asset allocation, overweighting energy, IT and industrials and underweighting healthcare, financials and materials aided performance. Underweighting utilities was a hindrance.
During the month, we maintained our portfolio strategy although we added to materials by adding to existing holdings. We also added JC Penney to the consumer discretionary sector. We reduced weightings in consumer staples, information technology (IT) and financials by trimming existing positions. Weightings in the energy sector were also reduced by trimming existing positions, although we also initiated a position in Apache during the month. Additions to other holdings in order of most capital committed included Alcoa, Noble, United States Steel, Nucor and Occidental Petroleum. Reductions to existing holdings in order of most capital raised included Halliburton, International Business Machines, General Mills, Qwest Communications and Kimberly-Clark.
As of month-end, the Fund is overweight IT, energy, industrials, materials and telecommunication services and underweight financials, healthcare and utilities. The Fund is neutral in consumer staples and consumer discretionary.
*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 | Kevin Rendino/Kurt Schansinger |
| Launch Date | Jan 8, 1997 |
| Base Currency | USD ($) |
| Additional Dealing Currencies | EUR (€), GBP (£) |
| Benchmark | Russell 1000 Value |
| Morningstar Sector | Equity North America |
| Total Fund Size (m) | USD ($) 1952.0 |
| EUSD Fund Attributes | |
| EUSD Fund Status | out of scope |
| Fees | % |
| Annual Management Fee (A shares) | 1.50 |
| Initial Charge (A shares) | 5 |
| Codes | |
| ISIN | LU0072461881 |
| Bloomberg Equity Ticker - Fund | MERBVAI LX |
| Bloomberg Equity Ticker - Benchmark | RU10VATR |
| Reuters Page Id | BLRKIS |
| Swiss Valoren Number | 567961 |
| CUSIP | L1049L218 |
| Research Ratings | |
| S&P Fund Management Rating | AA |
| Fund Risk Statistics | |||
|---|---|---|---|
| Name | 3 Years | 5 Years | Since Launch |
| Beta | 0.84 | 0.85 | 0.86 |
| Volatility (Annualised Standard Deviation) | |||
| US Basic Value Fund | 21.3% | 17.4% | 16.5% |
| Russell 1000 Value | 23.1% | 18.7% | 17.3% |
Risk Grading
Low
High
Non-distributing
Important Information
‡ On 1 January 2006 the benchmark changed from the S&P 500 Barra Value Index to the S&P 500 Citigroup Value Index (new index to be "spliced" with the history of the old benchmark).
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.