BlackRock European Absolute Alpha Fund

Capital at risk. All financial investments involve an element of risk. Therefore, the value of the investment and the income from it will vary and the initial investment amount cannot be guaranteed. 

 


2.89%

Annualised returns over a five-year period net of fees
Source: BlackRock, as at 30 December 2018

>230 years

European Investment Teams combined investment experience

3.48%

Volatility of annualised since inception (four times lower than MSCI Europe Index)

2.89%

Annualised returns over a five-year period net of fees
Source: BlackRock, as at 30 June 2018

>230 years

European Investment Teams combined investment experience

3.48%

Volatility of annualised since inception (four times lower than MSCI Europe Index)

Key Features

Navigating uncertainity in the markets


Navigating uncertainity in the markets

The BlackRock European Absolute Alpha Fund combines a traditional portfolio of ‘long’ European stocks (where the manager expects a company’s share price to rise) with a portfolio of ‘short’ positions (where the aim is to make money from an anticipated fall in a share’s price), allowing the managers to use their stock-picking skills to profit from falling, as well as rising, share prices. The portfolio is constructed with a risk aware approach, providing lower returns volatility. These funds can be attractive to investors during times of lower market returns and higher market instability.

RISK: Past performance is not a reliable indicator of current or future results. There is no guarantee that a positive investment outcome will be achieved.

Steady, idiosyncratic returns


Steady, idiosyncratic returns

Since inception the BlackRock European Absolute Alpha Fund has achieved positive returns in eight out of nine calendar years, generating returns in both bull and bear markets. These returns have been idiosyncratic in nature with Fund correlation to the European market -0.01 and beta -0.00 since inception.

RISK: Past performance in not a reliable indicator of current or future results and should not be the sole factor of consideration when selecting a product or strategy.

Low volatility


Low volatility

The Fund has a volatility of 3.48% annualised since inception1, four times lower than the MSCI Europe index. It seeks to maintain a steady risk profile even when market risk increases.

RISK: There is no guarantee that the Fund will perform as expected and remain within the stated volatility tolerances. The fact that the Fund remains within the stated volatility tolerances does not guarantee positive performance. The volatility management process may reduce the effect of falls in market prices but may equally moderate the effect of rises in market prices. When markets are volatile, managing volatility within tolerances will require the asset allocation of the Fund to be changed more frequently than normal. The cost of the transactions required to effect these changes will be met by the Fund and may affect returns.

World-class investment team


World-class investment team

Managed by David Tovey and Stefan Gries, both of whom have track records in long/short alpha generation. They are supported by BlackRock’s 20-person Fundamental European Equity team and are also able to leverage the firm’s global resources to produce proprietary research.

1 Source: BlackRock, August 2018.

Risks

Capital at risk. 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. You may not get back the amount originally invested. Changes in the rates of exchange between currencies may cause the value of investments to diminish or increase. Fluctuation may be particularly marked in the case of a higher volatility fund and the value of an investment may fall suddenly and substantially. Levels and basis of taxation may change from time to time. Tax treatment depends on the individual circumstances of each client and may be subject to change in the future.

Past performance is not a reliable indicator of current or future results and should not be the sole factor of consideration when selecting a product or strategy.

Fund-specific risks

Exchange rate risk: 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.

Complex derivative techniques (absolute return): The strategies utilised by the Fund involve the use of derivatives to facilitate certain investment management techniques including the establishment of both 'long' and 'synthetic short' positions and creation of market leverage for the purposes of increasing the economic exposure of a Fund beyond the value of its net assets. The use of derivatives in this manner may have the effect of increasing the overall risk profile of the Funds. Investors in this Fund should understand that the Fund is not guaranteed to produce a positive return and as an absolute return product, performance may not move in line with general stock market trends as both positive and negative share movements affect the overall value of the Fund. The Manager employs a risk management process to oversee and manage derivative exposure within the Fund.

Financial markets, counterparties and service providers: The Fund may be exposed to finance sector companies, as a service provider or as counterparty for financial contracts. Liquidity in the financial markets has been severely restricted, causing a number of firms to withdraw from the market, or in some extreme cases, becoming insolvent. This may have an adverse affect on the activities of the Fund.

Smaller Company Investments: The Fund may invest in smaller company shares which can be more unpredictable and less liquid than those of larger company shares.

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