STRATEGIES

Unconstrained (FIGO)

Philosophy

Fixed Income Global Opportunities (FIGO) is an unconstrained strategy designed to seek consistent, attractive returns across all market environments, while retaining the general risk profile of conservative fixed income investments.

The FIGO team invests in fixed income ideas from across the BlackRock platform, and uses a robust set of analytical and risk management tools to integrate them into the portfolio. FIGO is not tied to a benchmark and has no constraints regarding maturity, sector or geography. The investment team’s priorities are:

  • Seeking flexible generation of fixed income alpha, via investment in a diversified portfolio of global alpha sources.
  • Seeking broad diversification, lower absolute risk and lower correlation to traditional fixed income indices.
  • Seeking downside mitigation through dynamic risk budgeting.

Investment process

FIGO combines top-down direction-setting by lead portfolio managers with bottom-up opportunity identification and security selection by our sector specialists around the world. Portfolio managers begin by establishing a budget for the amount of risk that they’ll take across the portfolio, based on the current environment. The team then allocates risk between duration and credit as well as across each sector of the fixed income market.

The managers seek to identify the most attractive opportunities throughout the fixed income universe. Before allocating capital to any investment, the team conducts a thorough analysis to evaluate the risk/reward trade-off and how the investment’s inclusion would impact the overall portfolio. The process:

  • Continually evaluates and accesses the widest possible set of global fixed income alpha sources, with no bias toward any particular subsector.
  • Relies on the reach of our broad platform and proprietary risk tools to help portfolio managers determine riskadjusted return opportunities.
  • Employs a risk dashboard tool to track portfolio positions and behavior, and monitor the characteristics of the portfolio as a whole. Among other things, the dashboard enables the team to monitor overall duration and gauge the portfolio’s sensitivity to changes in interest rates.
  • Is supported by a dedicated team from BlackRock’s Risk and Quantitative Analytics unit, which helps generate insights into what various market or macro developments might mean for different sectors and for the portfolio as a whole.

Investors with the following objectives may find an allocation to FIGO worth considering:

  • Seeking to reduce the vulnerability of a traditional core portfolio to a rise in interest rates.
  • Seeking to generate additional return from a fixed income portfolio without greatly increasing credit risk or extending duration.
  • Accessing the full global opportunity set in fixed income in a risk-managed framework.

Leadership

Rick Rieder
Chief Investment Officer and Co-Head of Global Fixed Income
Bob Miller
Head of Multi-Sector & Rates