Fixed Income
Diversification at the core
A diversified core bond strategy can help your portfolio deliver more consistent performance through market cycles. BlackRock Total Return Fund seeks returns in a variety of fixed income sectors.
This article has a related client version.
Performance and positioning update
- The fund posted a negative return in October as rates experienced significant volatility due to strong economic data releases and uncertainty around the US election.
- Over the month, we increased our top-line duration to a meaningful overweight position versus the benchmark. We increased our position in the front-end of the curve to a modest overweight position as markets started repricing the amount of rate cuts in line with our view. Additionally, we added to our overweight in the belly of the curve. We increased our positions in Agency Mortgages, US High Yield Credit, and Structured Products.
Diversified sources of return
Source: BlackRock. Active return contribution represents above-benchmark performance. One basis point is one hundredth of one percent (0.01%). Return attribution is based on gross returns of the fund’s Institutional share class. Macro strategy is how the portfolio management team implements thematic and macro-economic investment views through duration, yield curve and foreign-currency positioning. Residual: This non-attributable portion of the fund’s total return is derived from trading and allocation effects across the fund’s investment strategies.
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David Rogal
Managing Director, Multi-sector Mutual Fund Team within Global Fixed Income
David Rogal, Managing Director, is a member of the Multi-Sector Retail & Rates team within BlackRock's Americas Fixed Income Group. He is a portfolio manager on the Multi-Sector Mutual Fund Team.
Rick Rieder
Chief Investment Officer of Global Fixed Income
Rick is BlackRock's Chief Investment Officer of Global Fixed Income, and Head of the Global Allocation Investment Team.
Chi Chen
Director, Multi sector Mutual Fund Team within Global Fixed Income
Chi Chen, Director, is a Portfolio Manager in BlackRock's Global Fixed Income Investment Group, focusing on US multi sector fixed income mandates and global government bond mandates. She is co-manager of BlackRock's Total Return Fund, Core Bond Fund, US Dollar Bond Fund, and Global Government Bond Fund.
I’m up at 3:45 every morning. I want to know where all the markets are. I work out for an hour then the day really gets going.
I’m Rick Rieder, Chief Investment Officer of Global Fixed Income at BlackRock.
So my job is investing money for clients trying to generate returns using fixed income assets within portfolios. From being in this business for 35 years, you learn you got to be thoughtful, you got to innovate, you got to be different, and then apply that to the experience you have and the research that you’re doing.
Education for me is literally the foundation of everything. I’m chairman of the board of North Star Academy. It’s over 14 charter schools, serving 6,000 kids in the city of Newark. We started an internship program to bring high school kids in to help them with not just understanding markets, the economy, finance, but also understanding how you interface in business. We’re helping to change the future of thousands of underserved kids.
It gives you a real boost to see the difference you can make.
There’s a lot to do in a day, but when you start to see what you can get done, I think it’s safe to say that I won’t look back and wish I had slept more.
Meet Rick Rieder: Morningstar’s 2023 Outstanding Portfolio Manager
Rick Rieder, Chief Investment Officer of Global Fixed Income, has been awarded the 2023 Morningstar Award for Investing Excellence, Outstanding Portfolio Manager. Rick Rieder’s consistent approach to managing strategies like Strategic Income Opportunities, Total Return, Global Allocation and more have helped funds deliver long-term success.
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Performance data quoted represents past performance and is no guarantee of future results. Investment returns and principal values may fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. All returns assume reinvestment of dividends and capital gains. Current performance may be lower or higher than that shown. Refer to blackrock.com for most recent month-end performance.
To obtain more information on the fund, including the Morningstar time period ratings and standardized average annual total returns as of the most recent calendar quarter and current month-end, please visit Total Return Fund.
The Morningstar RatingTM for funds, or "star rating," is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.
All fund performance and data based on Institutional shares, all other share classes will vary. Institutional shares are not available to all investors and that performance, fees, and ranking data for various share classes could be higher or lower.
Investing involves risk, including possible loss of principal.
Carefully consider the Funds' investment objectives, risk factors, and charges and expenses before investing. This and other information can be found in the Funds' prospectuses or, if available, the summary prospectuses which may be obtained visiting the iShares ETF and BlackRock Mutual Fund prospectus pages. Read the prospectus carefully before investing.
Stock and bond values fluctuate in price so the value of your investment can go down depending on market conditions.
International investing involves risks, including risks related to foreign currency, limited liquidity, less government regulation and the possibility of substantial volatility due to adverse political, economic or other developments. These risks often are heightened for investments in emerging/ developing markets or in concentrations of single countries.
Fixed income risks include interest-rate and credit risk. Typically, when interest rates rise, there is a corresponding decline in bond values. Credit risk refers to the possibility that the bond issuer will not be able to make principal and interest payments. Non-investment-grade debt securities (high-yield/junk bonds) may be subject to greater market fluctuations, risk of default or loss of income and principal than higher-rated securities. Principal of mortgage- or asset-backed securities normally may be prepaid at any time, reducing the yield and market value of those securities. Obligations of US govt. agencies are supported by varying degrees of credit but generally are not backed by the full faith and credit of the US govt. Securities with floating or variable interest rates may decline in value if their coupon rates do not keep pace with comparable market interest rates. The Fund’s income may decline when interest rates fall because most of the debt instruments held by the Fund will have floating or variable rates.
Mortgage-backed securities ("MBS") and commercial mortgage-backed securities ("CMBS") are subject to prepayment and extension risk and therefore react differently to changes in interest rates than other bonds. Small movements in interest rates may quickly and significantly reduce the value of certain mortgage-backed securities.
Collateralized Debt Obligations ("CDOs") carry additional risks including, but not limited to: (i) the possibility that distributions from collateral securities will not be adequate to make interest or other payments; (ii) the risk that the collateral may default or decline in value or be downgraded, if rated by a nationally recognized statistical rating organization; (iii) the Fund may invest in tranches of CDOs that are subordinate to other tranches; (iv) the lack of a readily available secondary market for CDOs.
Non-investment-grade debt securities (high-yield/junk bonds) may be subject to greater market fluctuations, risk of default or loss of income and principal than higher-rated securities.
The Fund's use of derivatives may reduce the Fund's returns and/or increase volatility and subject the Fund to counterparty risk, which is the risk that the other party in the transaction will not fulfill its contractual obligation. The Fund could suffer losses related to its derivative positions because of a possible lack of liquidity in the secondary market and as a result of unanticipated market movements, which losses are potentially unlimited. There can be no assurance that the Fund's hedging transactions will be effective.
The opinions expressed are those of the fund's portfolio management team as of November 27, 2024, and may change as subsequent conditions vary. Information and opinions are derived from proprietary and nonproprietary sources deemed by BlackRock to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this material is at the sole discretion of the reader. Percent of net assets figures represent the Fund’s exposure based on the economic value of securities adjusted for futures, options, swaps and convertible bonds.
BlackRock provides compensation in connection with obtaining or using third-party ratings and rankings
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