The Emerging Market Allocation Fund, part of BlackRock’s Luxembourg domiciled Strategic Funds Sicav, aims to deliver equity-like returns, without the volatility commonly associated with emerging markets.
The managers of the vehicle will be able invest in the full range of usual “stock and bond” assets across traditional emerging and frontier markets. In addition, the portfolio managers will be able to use a number of alternative strategies such as shorting stocks.
BlackRock said the weighting of each component within the fund is optimised for a long-term smooth ride but can vary tactically according to market conditions.
Alex Hoctor-Duncan, head of retail for Europe, Middle East and Africa 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.”
The lead manager of the fund is Jeff Shen, head of emerging markets, who is supported by portfolio managers Seanna Kim and Rodolfo Martell.
BlackRock believes 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.
“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,” said Shen.
This is a continuation in BlackRock growing its emerging market investment capabilities. It launched two new emerging market debt funds, both of which are classed under the BlackRock Global Funds range, in February 2013.
A few months prior, in November 2012, the firm had unveiled its Emerging Markets Absolute Return fund, one of BlackRock’s Strategic Funds.
