BlackRock launches multi-asset fund for EM investors

BlackRock has launched its Strategic Funds (BSF) Emerging Market Allocation fund which aims to provide a core solution for investors seeking exposure to emerging markets.

The fund is constructed to deliver equity-like returns but without the volatility commonly associated with emerging markets.

It has the ability to invest in any asset class across traditional emerging and frontier markets. It is also able to look beyond traditional stocks and bonds, and include ‘alternative’ strategies like long/short in its portfolio. The weighting of each component is optimised for a long-term smooth ride but can vary tactically according to market conditions.

Alex Hoctor-Duncan (pictured), head of Retail for Europe, Middle East and Africa (EMEA) at BlackRock, said: “Emerging markets typically experience greater volatility relative to developed markets, like we have seen in recent weeks.

History has shown however, that having the conviction to stay the course throughout volatile periods can have a meaningful impact for investors. A £100,000 investment in both emerging markets equities and bonds since the turn of the century would have returned £329,317.”

The fund will be led by Jeff Shen, head of BlackRock Emerging Markets. He will be supported by portfolio managers Seanna Kim and Rodolfo Martell. Shen said: “The diversity and depth of emerging market territories is growing, and risk levels and opportunities are constantly changing. It is becoming harder to talk about emerging markets as a group, with increasing country differentiation making it important to monitor countries on a fundamental basis.”

“We believe the fund will be attractive to investors because it can move swiftly to seize the best opportunities for growth, but also reduce risk at times of market stress, meaning investors enjoy a smoother ride,” added Shen.

In February last year, BlackRock launched two new emerging market debt funds, the BlackRock Global Funds (BGF) Emerging Markets Corporate Bond Fund and the BGF Emerging Markets Investment Grade Bond Fund. It also launched the BSF Emerging Markets Absolute Return fund in November 2012.

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