BlackRock Total Return Fund

Morningstar rating logo

Not all bond funds are built the same. While many core bond funds focus on a narrow segment of the market, the BlackRock Total Return Fund takes a multi-sector approach, seeking to generate returns from diverse sources.

Rated against 852 Intermediate-Term Bond Funds as of 9/30/17, based on risk-adjusted total return. Ratings are determined monthly and subject to change. The Overall Morningstar Rating for a fund is derived from a weighted average of the performance figures associated with its 3-, 5-, and 10-year (if applicable) Morningstar Rating metrics.1 Morningstar has awarded the Fund a Silver Medal. Fewer than 10% of US open-end funds hold medalist ratings (Effective 12/15/16).2 Institutional shares are not available to all investors. Performance, fees and rankings for other share classes could be higher or lower.


Today’s bond dilemma

Balancing outperformance and diversification is a central challenge for today's bond investor.
Bond yields near record lows
Stretching for yield undermines diversification
Stocks near record highs
Portfolio diversification is more important than ever
The challenge
Find a bond fund that diversifies and delivers outperformance

Overcoming the challenge

Investors need two things from a core bond fund.

1 “Double” diversification – With stocks near record highs, it’s critical to invest in core bond funds that diversify equity risk. But with bonds yields near record lows, it’s also important to ensure your core bond manager is diversified across bond sectors.

– Seek a bond fund that has a track record of delivering excess returns in a low yield world.

Diversify equity risk

With equity markets near all-time highs, many advisors want protection in case of a sell-off. BlackRock Total Return Fund has half the correlation to the S&P 500 versus its peers and has delivered better protection when stocks have fallen.

Correlation to S&P 500 Index

Chart:Correlation to S&P 500 Index

Source: Morningstar. Based on the cumulative period 9/30/2012 – 9/30/2017. Past performance is no guarantee of future results. Correlation of 0.11 represents the average correlation of the entire Morningstar Intermediate-Term Bond Fund category to the S&P 500 Index. Correlation of 0.22 represents the correlation of the top decile performing funds (as of 9/30/17) within the Morningstar Intermediate-Term Bond Fund category to the S&P 500 Index.

Returns during S&P 500 sell-offs

Chart: Returns during S&P 500 sell-offs

Source: Morningstar as of 9/30/2017. S&P 500 Sell-Offs is defined as calendar month period in which the S&P 500 fell by 2 or more percent. Based on 9 monthly periods from 12/31/10-9/30/17. For standardized performance, click here

Diversify across bond sectors

BlackRock Total Return Fund has delivered first decile performance over five years without taking excessive sector bets. Be aware of core bond funds that may take concentrated sector bets, such as in mortgages, which could add more risk to your portfolio.

MAHQX sources ideas across BlackRock's high-performing bond platform

MAHQX sources ideas across BlackRock's high-performing bond platform

Source: Morningstar. As of 9/30/17. 3

Diversified positioning for all bond market scenarios
Upside/downside capture ratio vs. benchmark

Diversified positioning for all bond market scenarios

Based on 5 year annualized returns as of 9/30/2017 vs the Bloomberg Barclays U.S. Aggregate Bond Index.

Outperformance with diversification

BlackRock Total Return Fund has outperformed the category average with better diversification.

Total Return Fund
Intermediate-Term Bond
Category Average
Higher return (5 year)      3.43% 2.12%
Higher 30-day SEC yield
     2.75% / 2.69% 2.14%
Higher Sharpe Ratio (5 year)      1.07 0.68
Better diversification
(correlation to equities)
     0.04 0.11

Source: Morningstar. Data is from 9/30/12-9/30/17. Yield is based on 30-day SEC yield (subsidized & unsubsidized for the fund; subsidized for the category as unsubsidized is unavailable) as of 9/30/2017. Correlation to equities based on the 5-year correlation (9/30/2012 – 9/30/2017). All data based on the Institutional shares of the Total Return Fund. Diversification cannot assure profit or protect against a loss. Past performance does not guarantee or indicate future results. For standardized performance, click here

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. Current performance may be lower or higher than that shown. All returns assume reinvestment of all dividend and capital gain distributions. Refer to for current month-end performance. Investment returns reflect total fund operating expenses, net of all fees, waivers, and/or expense reimbursement. Expenses stated as of the fund’s most recent prospectus: Institutional Shares Total/Net, Including Investment Related expenses are 0.62%/0.59% and have contractual waivers with an end date of 1/31/18 terminable upon 90 days’ notice.

Have questions? Contact us at 1-877-ASK-1BLK or

Total Return Fund Monthly Insights

Subscribe to get timely market outlooks and portfolio positioning insights every month.