BlackRock has launched the Systematic Multi-Strategy ESG Screened Fund (the Fund), its first single-manager multi-strategy liquid alternatives UCITS fund with daily liquidity in Europe.
The Fund is designed to generate more balanced and consistent returns across market cycles for investors who are seeking equity diversification but want more than the low yields currently offered by more traditional bonds.
The fund aims to provide a total return in the form of capital and income through three uncorrelated and complementary strategies. These strategies include:
Directional Asset Allocation – seeks market upside participation by investing in a diversified portfolio of income generating assets
Macro – offers incremental return by maximising opportunities across global interest rate markets
Defensive Long/Short Equity – drives defensive returns by applying credit expertise to equity selection.
“The ongoing macro environment of low yields and rising inflation has forced investors to re-think the role of fixed income across portfolios as the return and diversification benefits have become more challenged,” says Jeff Rosenberg, Senior Portfolio Manager of the Fund. “This Fund can be a solution for investors to tackle these macro and portfolio construction headwinds as it helps to add alternative sources of portfolio diversification and resilience.”
The introduction of the Fund in Europe builds off the successful launch and six-year track record of the US sister strategy and is managed by the US$82bn Systematic Fixed Income business. The business is part of BlackRock’s Systematic Investment group, which has USD257 billion in AUM across alpha-seeking and factor-based investments, and more than 35 years’ experience of investing systematically in equities, fixed income, multi-asset, and alternatives.
The newly launched Fund is categorised as Article 8 under the European Union’s Sustainable Finance Disclosure Regulation (SFDR), in line with BlackRock’s expectation that 70 per cent of its fund launches and repositionings in Europe this year qualify for Article 8 or 9.
The Fund’s ESG framework is applied across all three strategies and has been designed to screen out exposure to issuers involved in activities such controversial weapons, oil sands, thermal coal, tobacco and civilian firearms sectors, along with issuers in violation of the UN Global Compact and remove issuers with the lowest ESG scores.