A sub-fund of BlackRock UCITS Funds

Defensive Yield 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.

 


"Modelling" your duration

In our experience, many investors need higher returns than those they expect to achieve on indexed allocations. Simply increasing their exposure to higher risk strategies, however, may create unacceptable downside risk. Systematic active investment strategies, sometimes called quantitative strategies, may offer investors a third way.

Systematic active investing uses proprietary techniques to exploit fundamental insights in a disciplined and scientific way with the aim of delivering consistent, differentiated outperformance. In an age in which we are overloaded with information, the ability to process large amounts of data by using scientific, quantitative techniques can create a significant advantage. As can the ability to potentially anticipate and interpret flows in a market that has been transformed by higher volumes and rapid trading. 

defensive-yeild-chart

For illustrative purposes only.

 


The BlackRock Defensive Yield Fund utilises systematic investing with an aim of generating income by investing predominantly in fixed income securities while aiming to preserve capital. The Fund blends our euro short duration and credit screened corporate bond strategies, targeting a low level of interest rate duration and credit risk, while also aiming to mitigate tail risk through a comprehensive screening and optimisation process. The use of active and semi-active capabilities gives this solution its innovative character.

The Fund aims to provide income while preserving capital by investing predominantly in fixed income securities. It intends to invest at least 40% of its assets in fixed income securities that are investment grade and up to 35% in high yield fixed income.

Risks: There can be no guarantee that the investment strategy can be successful and the value of investments may go down as well as up. Risk management cannot fully eliminate the risk of investment loss.

The Investment Team
Riyadh Ali
Portfolio Manager within BlackRock’s Model-Based Fixed Income Portfolio Management Group
Lauritz Ringdal
Head of the Model-Based Fixed Income Credit team
Felicity Percy
Lead Product Strategist for Model-Based and Index-Fixed Income Funds

Fund Specific risks

Credit Risk: The issuer of a financial asset held within the Fund may not pay income or repay capital to the Fund when due.

Liquidity Risk: Lower liquidity means there are insufficient buyers or sellers to allow the Fund to sell or buy investments readily.

Financial Markets, Counterparties and Service Providers Risk: 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.

Interest Rate Risk: Changes to interest rates, credit risk and/or issuer defaults will have a significant impact on the performance of fixed income securities. Non-investment grade fixed income securities can be more sensitive to changes in these risks than higher rated fixed income securities. Potential or actual credit rating downgrades may increase the level of perceived risk.

High Yield Bonds: The Fund invests in high yielding bonds. Companies which issue higher yield bonds typically have an increased risk of defaulting on repayments. In the event of default, the value of your investment may reduce. Economic conditions and interest rate levels may also impact significantly the values of high yield bonds.