Unconstrained Equity. Ignore the noise.
In a market increasingly driven by short-term flows and rapid trading, it’s easy to lose sight of what really drives returns.
Yet true business value is built over time and investors who can look beyond the noise may be better positioned to capture it.
Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.
Our approach
We take a long-term, benchmark-agnostic approach, focusing on a small number of exceptional companies. By looking beyond short-term market noise, we aim to capture the benefits of compounding through disciplined stock selection.
A distinctive approach
In recent decades, the innovation of benchmarking, the rise of computer-based or ‘quantitative’ investing and the increased availability of near-term data has led to a shortening of investment horizons in public equity markets. We want to be different.
To generate compelling returns in public equities, we believe a long-term approach is required. After all, if you believe a company is genuinely differentiated, why erode its potential by trading based on short-term, often circumstantial information? You wouldn’t bet against Roger Federer in his prime because he dropped a set or it started raining during play.
The BlackRock Global Unconstrained Equity Fund (UK) seeks to:
The result? A collection of the very best businesses in developed markets, with a long-term mindset.
Manager skill risk: There is no guarantee that a positive investment outcome will be achieved. Concentration risk: Investment risk is concentrated in specific sectors, countries, currencies or companies. This means the Fund is more sensitive to any localised economic, market, political, sustainability-related or regulatory events.
An expert investment team
The Fund is managed by Alister Hibbert and Michael Constantis, two of BlackRock’s most proven equity managers with over 50 years of combined investment experience.* They harness the insights of the dedicated Strategic Equity Team to select holdings and manage the portfolio on an ongoing basis.
The team draws on BlackRock’s global network of investment insights across both public and private markets and different asset classes, providing real-time insights from company interactions around the world. We believe this is a crucial advantage when managing unconstrained equity portfolios: it can help uncover new investment opportunities and also identify potential sources of disruption or structural change that might impact existing holdings.
Our investment approach may be simple, but choosing the investments is not: we believe being located at the epicentre of this information ecosystem can significantly enhance our chances of success.
Alister Hibbert
Michael Constantis
*Source: BlackRock, 31st May 2026.
Identifying long term opportunities
Being ‘unconstrained’ means we do not simply look to tilt away from a benchmark. Instead, we start with a blank sheet of paper to build the very best portfolio we can based on individual company analysis. Our selection criteria is driven by four key attributes that we believe indicate the potential for long-term compounding.
What makes us different from most is the questions we ask. We focus on a company’s ability to sustain its returns, reinvest cash flows in attractive new areas of growth and differentiate itself from the competition as new technologies, regulations or preferences emerge.
Relatively few businesses meet these strict criteria, meaning we will typically invest in 20-30 companies at any one time. This provides, in our view, enough diversification to build a fundamentally resilient portfolio while taking larger position sizes to allow company performance to drive portfolio returns.
Risk: Reference to the names of each company mentioned in this communication is merely for explaining the investment strategy and should not be construed as investment advice or investment recommendation of those companies.
We adopt a real-world risk approach to ensure we focus on business fundamentals. Portfolio turnover is expected to be low and but competition for capital is high. We have a disciplined approach to trading and portfolio construction.
Our trading criteria:
We divest if the structural outlook for a business and the long-term investment thesis deteriorates
Research process uncovers superior long-term investment case; occasional position size changes to reflect opportunity set
Extended valuation limits total return potential; extraordinary opportunities arising in extreme market conditions, such as exiting a bear market
Maintain max 10% position size; monitor common industry cash flow risk; seek to ensure strong foundation of defensive earnings
Client portfolio perspectives
BlackRock Global Unconstrained Equity Fund (UK) can be used in many ways within a client portfolio including:
Note: The active share and number of stocks reflects the portfolio managers’ current process, which is subject to change without notice. Numbers are indicative and actual portfolio may fall outside this ranges from time to time.
Source: BlackRock, 31st May 2026. For illustrative purposes only. This material is provided for informational purposes only and is not intended to investment advice or a recommendation to take any particular investment action.
The Fund is actively managed and aims to provide a return on your investment (generated through an increase in the value of the assets held by the Fund) over the long-term. We believe that over a longer time horizon (5 years or more), the MSCI World Index is an appropriate proxy to use to evaluate the success of the Fund.
The MSCI World Index is used by the Investment Manager for risk management purposes to ensure that the degree of deviation from the index remains appropriate given the Fund’s investment objective and policy. The portfolio management team does not believe this will represent a constraint on the portfolio day to day and will not be anchoring to any tracking error or benchmark in the normal running of the portfolio.
Unconstrained Equity Investing - FAQs
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Unconstrained equity investing is an active, benchmark-agnostic approach focused on identifying the most attractive businesses based on fundamental research.
Unlike traditional equity strategies that align portfolio weights to an index, an unconstrained equity strategy gives the manager the flexibility to invest selectively across sectors, regions, and market capitalisations. The portfolio can therefore look very different from the broader market.
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Index and passive equity strategies aim to track the performance of a specific benchmark. In contrast, an unconstrained equity strategy is actively managed and seeks to outperform the market over time. Typically an unconstrained equity strategy:
- Selects a smaller number of companies based on conviction
- Is not required to hold companies simply because they are included in an index
- Can allocate capital freely across sectors and regions
- Seeks to generate long-term alpha rather than match benchmark returns
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Because unconstrained equity strategies are selective and benchmark-agnostic, they carry specific risks investors should consider:
- Concentration risk: fewer holdings can increase the impact of individual company performance
- Active decision risk: outcomes depend on the manager’s investment decisions
- Short-term volatility: returns may diverge from the broader market over shorter periods
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An unconstrained equity fund can play different roles within a broader portfolio depending on investor objectives:
- Providing exposure to high-conviction ideas alongside passive equity allocations
- Offering access to a differentiated, actively managed global equity strategy
- Acting as an alpha-focused allocation within a diversified portfolio
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Compounding earnings refers to a company’s ability to grow their earnings year after year, and that growth building on itself over time (i.e. growth on growth). An unconstrained equity fund will seek out businesses which can sustain above-average earnings growth for longer than the market expects and compound that growth over time.
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Long-term earnings compounding is a powerful driver of returns, as equity performance is ultimately driven by earnings and cashflows. Because the market struggles to accurately value long-duration growth, compounding businesses are often undervalued, creating a compelling alpha opportunity.
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Active managers typically focus on companies with the following characteristics:
- High and sustainable returns on capital
- Strong competitive positions or durable advantages
- Attractive reinvestment opportunities
- Structural growth drivers
- Experienced and aligned management teams
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Unconstrained equity portfolios are typically more concentrated than traditional equity funds, reflecting the manager’s highest-conviction ideas. This concentration allows each investment to have a meaningful impact on overall returns.
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While unconstrained strategies are not tied to a benchmark, risk management remains a core part of the investment process:
- Focusing on companies with durable earnings and strong balance sheets
- Maintaining diversification across different business models and return drivers
- Ongoing monitoring of company fundamentals and risks
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