“Multi-task” your portfolio with BlackRock Asian Tiger Bond Fund

IMPORTANT:

  • • The Asian Tiger Bond Fund seeks to maximise total return. The Fund invests at least 70% of its total assets in the fixed income transferable securities of issuers domiciled in, or exercising the predominant part of their economic activity in, Asian Tiger countries. The Fund may invest in the full spectrum of available securities, including non-investment grade. The currency exposure of the Fund is flexibly managed.
  • • The Fund may invest in debt securities that are subject to actual or perceived ratings downgrade. The Fund invests in certain emerging markets and may be subject to political, tax, economic, social and foreign exchange risks. An increase in interest rates may adversely affect the value of the bonds held by the Fund. The Fund may invest in non-investment grade and unrated bonds that may be subject to higher default, volatility and liquidity risks. The Fund invests in bonds issued or guaranteed by governments or authorities, which may involve political, economic, default or other risks.
  • • The Fund is subject to currency risk, foreign investments restrictions risk, geographical concentration risk in Asian Tiger countries, liquidity risk, securities lending counterparty risk, currency conversion risk including Renminbi denominated Classes and contingent convertible bonds risk.
  • • Class 6 Shares pay dividends gross of expenses and/or from capital at the Directors’ discretion. Class 8 Shares pay dividends gross of expenses and/or from capital at the Directors’ discretion and include interest rate differentials arising from share class currency hedging. Negative interest rate differentials may decrease the dividends paid. Paying dividends gross of expenses may result in more income being available for distribution; however these shares may effectively pay dividends from capital – may amount to a partial return or withdrawal of an investor’s original investment or capital gains. All declared dividends result in an immediate reduction in the NAV price of the share class on the ex-dividend date.
  • • The Fund may use derivatives for hedging and for investment purposes. However, usage for investment purposes will not be extensive. The Fund may suffer losses from its derivatives usage.
  • • The value of the Fund can be volatile and can go down substantially within a short period of time. It is possible that a certain amount of your investment could be lost.
  • • Investors should not make investment decisions based on this document alone. Investors should refer to the Prospectus and Key Facts Statement for details including risk factors.
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Whether it is saving for a holiday, buying a new house or fulfilling a dream, everyone has competing demands on their income. Instead of feeling stretched on a single income source, why not “multi-task” your portfolio to deliver multiple income streams to achieve your goals faster?

BlackRock Asian Tiger Bond Fund offers you an opportunity to expand your income sources with ease. It’s time to say goodbye to your single-income life and hello to achieving more with your income.

Why invest in BlackRock Asian Tiger Bond Fund?

The fund invests predominantly in Asian USD Credit across both the investment grade and high yield space with an overall investment grade rating.
A Core “Credit+Plus ” Asian Credit Strategy
A Core “Credit+Plus ” Asian Credit Strategy
Credit focus complemented by rates and currency allocation
Finding Opportunities across APAC
Finding Opportunities across APAC
Has the flexibility to invest across Asian Fixed Income in the search for more stable, positive income.
Robust Platform and Experienced Team
Robust Platform and Experienced Team
An integrated Asian fixed income team with expertise across traditional and alternative strategies.
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4.8 Percent

Annualized Yield – A6 USD

Latest (06/28/2019) annualized yield (A6 share class aims to pay a dividend on a monthly basis. Dividend Payment is not guaranteed. The Fund may effectively pay dividend from capital. See important information 4)

Latest 6 months dividend table – A6 USD

Month Annualized Yield
June 2019 4.87%
May 2019 4.91%
April 2019 4.83%
March 2019 4.82%
February 2019 4.92%
January 2019 4.95%

A6 share class annualized yield = (Dividend rate / ex- date NAV) * (12*100). Dividend yield is not guaranteed, and is not indicative of the return of the Fund. Past performance is not a guide to future performance. Investors may not get back the full amount invested. A6 share class inception date: 02-Apr-2012.

Supportive corporate credit fundamentals & positive rating trend in Asia

1. Asian credit’s improving fundamentals and resilient credit metrics are supportive for the region. This is reflected in the improving 12-month rolling upgrade / downgrade ratios.

Improving upgrade/downgrade ratios

Supportive fundamental

 

Sources: Bloomberg and J.P. Morgan estimates, 31 Dec 2018.

2. Relative value matters in an environment of higher volatility and lower expected returns.

Asian USD credit has the ability to diversify a fixed income portfolio  while targeting to generate positive return at lower volatility.

Supportive fundamental

 

The figures shown relate to past performance.  Past performance is not a reliable indicator of current or future results.  Source: Bloomberg, 30 Apr 2019.  Asian USD Credit: JPM Asian Credit Index; Global IG Corp: Barclays Global Corporates (USD Hedged); Global HY Corp: Barclays High Yield Corporates (USD Hedged). Index performance returns do not reflect any management fees, transaction costs or expenses.  Indices are unmanaged and one cannot invest directly in an index.

Growth of Hypothetical 10,000 performance since launched in 1996

Competitive performance

 

Past performance is not a guide to future performance. Investors may not get back the full amount invested.
Performance is calculated based on the calendar year end, NAV-to-NAV with dividend reinvested. Performance figures are calculated net of fees. Inception date: 2nd February, 1996. 5 years performance: 2018: -3.15%, 2017: 6.72%, 2016: 4.70%, 2015: 2.28%, 2014: 8.19%, YTD: 8.28%. Data as of end June 2019.
These figures show as a percentage change of NAV of Share Class of the Fund based on a hypothetical $10,000 investment in the Share Class. Performance is calculated in the relevant share class currency, including ongoing charges and taxes and excluding subscription and redemption fees, if applicable.

 


 

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Your Top 6 Questions Answered

There are often questions on why you should consider an allocation to Asian fixed income and the BlackRock Asian Tiger Bond Fund in the current environment. We try to address the most common concerns for investors.

“Why should I allocate to this fund and asset class in today’s environment?”

  • We have seen, and probably will continue to see, significant volatility in the market. How should I position my portfolio now?

    Global economic growth is expected to slow and interest rates remain low; assets that can generate stable income will be appealing to investors. In fact, having the flexibility to adjust asset allocation based on changing market opportunities and conditions plays a vital role. BlackRock Asian Tiger Bond has the ability to invest opportunistically across regional fixed income in the search for positive income while depending less on market conditions.

  • I have been holding US credit. What other investment options should I consider that can provide more upside potential at similar or lower risk?

    Asian credit may be a good complement to US credit in the current market condition.  In general, at similar credit rating profile, yields for Asian Credit would be higher while duration risks are lower. In the current environment, taking lower duration risk is important to keep exposure to broader market risk within manageable levels.

     

    Yield Average credit rating Duration
    Asian Investment Grade 3.42% A- 4.88
    US Investment Grade 2.62% AA 5.34
    Asian High Yield Credit 7.18% B+ 2.97
    US High Yield Credit 6.09% B+ 3.39

    Source: BlackRock, Bloomberg, end May 2019. Asian Investment Grade refers to JPM Asian Credit IG Index; US Investment Grade refers to BBG Barc US Agg Index; Asian High Yield Credit refers to JPM Asian Credit non-IG Index; US High Yield Credit refers to BBG Barc US Corp HY 2% Issuer Capped Index. Index returns are for illustrative purposes only. Index performance returns do not reflect any management fees, transaction costs or expenses. Indices are unmanaged and one cannot invest directly in an index.

  • How could US interest rates moves impact Asian credit?

    We believe global monetary policy is on an accommodative trajectory. This benefits Asian Credit because:

    •  US treasury yields are a component of Asian Credit yields, so when they go lower/are stable, it supports price returns.

    •  Lower rates in developed markets makes emerging market assets more attractive for income-oriented investors.

    •  An accommodative Fed supports investor sentiment towards emerging market local markets – an area that the BlackRock Asian Tiger Bond Fund tactically invests in.

  • What are the long term catalysts for Asian credit?

    More than US$10 trillion developed market government bonds currently yield negative* return, as a result of consistently low interest rates in the post-GFC era. With a growing ageing population, there is a strong demand for investment tools that can offer stable income. Quality bonds would remain in high demand even as the market prices in the risks arising from market uncertainties.

    In Asia, sovereign fundamentals remain supportive. Although fundamentals (and therefore vulnerabilities) vary very widely across emerging markets, Asia is on a stronger footing vs. broader emerging markets.

    *Source: BlackRock, Bloomberg, Financial Times, as of May 2019

  • Is Asian credit resilient to market volatility?

    Asian credit’s improving fundamentals and resilient credit metrics are supportive for the region. We see lower risks of downgrade / default and resilient corporate credit fundamentals.

    Asian bond investors are mostly domestic (as of 2Q2019: 70-80%* of investors in Asian credit were from Asia), meaning a stickier investor base less likely to redeem during drawdowns.

    Furthermore, over the past 10 years, Asian credit# and the BlackRock Asian Tiger Bond Fund has returned negative performance in only two years.

     

    2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
    BlackRock Asian Tiger Bond Fund (%) 26.2 13.1 1.9 14.2 -3 8.2 2.3 4.7 6.7 -3.2
    Benchmark# (%) 28.3 10.6 4.1 14.3 -1.4 8.3 2.8 5.8 5.7 -0.8

    *Source: JP Morgan, Bond Radar, as of May 2019

    #JP Morgan Asian Credit Index
    Source: Bloomberg, 31 December 2018
    BlackRock Asian Tiger Bond Fund A2 USD. Inception date: 2nd February, 1996. YTD: 8.28%. Data as of end June 2019.
    Past performance is not a guide to future performance. Investors may not get back the full amount invested. Performance is shown on a NAV to NAV price basis with income reinvested for A2 USD share class. Fund performance figures are calculated net of fees. Index returns are for illustrative purposes only. Index performance returns do not reflect any management fees, transaction costs or expenses. Indices are unmanaged and one cannot invest directly in an index.

  • What does the inclusion of Chinese onshore bonds into the Bloomberg index mean for Asia investors?

    Investors in Asian fixed income have recently been focused on China. The inclusion of Chinese onshore bonds into a global index (Bloomberg Barclays Global Aggregate Index) was a milestone in the ongoing opening-up of Chinese markets to international investors. Most analysts expect other global index providers to follow suit, bringing significant inflows to the domestic bond markets. The BlackRock Asian Tiger Bond Fund will benefit from its flexibility in being able to invest in both onshore and offshore Chinese bonds.