With yields and growth still low and markets becoming more volatile, it could be harder for your clients to capture the returns they need. They might need to look for new ways to generate long-term growth.

The BSF Style Advantage Fund offers to look at absolute return investing through a different lens. By harnessing the power of factor investing, the Fund exploits a diverse set of style strategies including value, momentum, quality, and defensive factors in an innovative, long/short, multi-asset portfolio.

  • Time-tested sources of returns

    Style factors have proven their ability to generate returns and add true diversification to a portfolio over time. The ability to systematically capture and combine exposure to these factors to generate absolute returns is a new development.

  • Absolute returns with minimal correlation

    This is a market-neutral strategy which aims to perform in various market environments, with minimal correlation to equity markets.

  • Cost efficiency

    The Fund is optimised to minimise transaction costs. Our scale and technology allow us to trade efficiently and manage risk effectively to offer a lower cost approach to investors.

    The Fund is equipped to deliver hedge fund-like benefits while using highly liquid instruments, harnessing BlackRock’s scale and technology to trade efficiently and manage risk effectively to offer a lower cost approach to investors.

 

Blending style factors to create an optimal portfolio

Hypothetical risk allocation of BSF Style Advantage Fund

BSF Style Advantage Fund

For illustration only

 

1Assets managed by BlackRock. Source: BlackRock, as at 31 March 2016.
2Typical portfolio holdings. Actual number of positions in the portfolio may be lower or higher.
3BlackRock, as at 31 March 2016

Fund Specific risks
Exchange Rate Risk: Overseas investment will be affected by movements in currency exchange rates. Structured credit products: The fund(s) may invest in structured credit products such as asset backed securities (‘ABS’) which pool together mortgages and other debts into single or multiple series credit products which are then passed on to investors, normally in return for interest payments based on the cash flows from the underlying assets. These securities have similar characteristics to corporate bonds but carry greater risk as the details of the underlying loans is unknown, although loans with similar terms are typically packaged together. The stability of returns from ABS are not only dependent on changes in interest-rates but also changes in the repayments of the underlying loans as a result of changes in economic conditions or the circumstances of the holder of the loan. These securities can therefore be more sensitive to economic events, may be subject to severe price movements and can be more difficult and/or more expensive to sell in difficult markets. Property/Commodity ETFs: Emerging markets: Emerging market investments are usually associated with higher investment risk than developed market investments. Therefore the value of these investments may be unpredictable and subject to greater variation.
Credit risk – government bonds: Fixed income securities issued by governments can be affected by the perceived stability of the country concerned and proposed or actual credit rating downgrades.
Complex Derivative Strategies: Derivatives may be used substantially for complex investment strategies. These include the creation of short positions where the Investment Manager artificially sells an investment it does not physically own. Derivatives can also be used to generate exposure to investments greater than the net asset value of the fund / investment trust. Investment Managers refer to this practice as obtaining market leverage or gearing. As a result, a small positive or negative movement in stockmarkets will have a larger impact on the value of these derivatives than owning the physical investments. The use of derivatives in this manner may have the effect of increasing the overall risk profile of the Funds.
Financial Markets, Counterparties and Service Providers: The insolvency of any institutions providing services such as safekeeping of assets or acting as counterparty to derivatives or other instruments, may expose the Fund to financial loss.

RSM-4224

Key facts

BSF Style Advantage Fund

BSF Style Advantage Fund

BSF Style Advantage Fund

Investment process and philosophy

 

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Innovation at the heart of your portfolio

David Gibbon explains how the Fund exploits style factors to create an innovative portfolio.