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IM|Power Selector Awards

IM|Power 2020 Wisdom of the Selector Awards Winner: Blackrock

Posted by on 28 October 2020
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IM|Power recently teamed up with SharingAlpha to present the 2020 Wisdom of the Selector awards, which gave an opportunity to celebrate leading ESG funds, driving new standards and delivering alpha across a variety of categories. We interviewed each of the winners to find out what makes their funds stand out and how they’ve protected investments against recent market volatility.  You can see the full list of winners and runners up here

Following Blackrock's win in the Multi-Asset ESG category, we spoke to the people behind the scenes, Conan McKenzie and Jason Byrom, Blackrock, to find out more about the services and products they offer.

Tell us, what makes your fund stand out compared with your peers?

There is growing demand for sustainable investment options that deliver long-term growth and demonstrate resilience during periods of heightened market volatility. The BlackRock Global Fund (BGF) ESG Multi-Asset Fund is well placed to answer this call in 5 key ways:

  1. Longstanding Experience: The Diversified Strategies Team has been managing Multi-Asset funds for clients since 2001. Furthermore, whilst ESG investing may seem like a recent development, ESG is not new to the team -- they have many years of experience in running ESG-screened mandates for charities leveraging on the market-leading expertise of the BlackRock Sustainable Investments team and actually made the decision to fully integrate ESG considerations into its investment process over 3 years ago.
  2. Strong performance track record: dating back to 2008 when the ESG Multi-Asset team took over the management of the fund, he fund has delivered consistent top quartile performance within the Moderate Allocation EUR sector and as at 30/09/2020 is top quartile over the 1 year, 3 year annualized, 5 year annualized and 10-year annualized periods earning the fund a 5 star Morningstar rating.
  3. Established and Growing Assets Under Management: The BlackRock Global Fund (BGF) ESG Multi-Asset Fund (ESG MA) is now one of the largest environmental, social and governance (ESG) multi-asset funds globally. Many ESG funds are launched as new funds however ESG MA was repurposed from a fund with existing critical mass and a strong performance track record. As at 30/09/2020, the fund’s assets under management have increased by 176% since the repurposing of the fund to an ESG focused strategy on the 25th of March 2019.
  4. A comprehensive triple-layered approach to ESG integration: We firmly believe that we employ the most comprehensive approach to ESG integration on the market. Our triple-layered approach to ESG seeks to ensure that the fund is aligned with our clients’ values and takes active strides to drive positive environmental and social change whilst keeping strong financial returns at the forefront of the fund’s aims. The fund achieves this by excluding 9 controversial sectors and UN Global Compact Violators.
  5. Flexible approach to asset allocation: We believe that active asset allocation is the main driver of returns. The strategy invests across equities, bonds, alternatives and cash in order to allow flexibility to address the challenges and opportunities on the investment horizon and across market cycles.

How do you protect investments against the kind of market volatility we’ve seen this year?

We firmly believe that choosing a global multi-asset strategy with a strong focus on ESG factors that employs a robust risk framework may help investors better navigate changing regulatory and market conditions and provide consistent performance across market cycles.

The team tactically manages the risk profile of the portfolio to reflect their risk appetite, either adding or reducing risk through the incorporation of alpha or risk management strategies. The ability to invest in off benchmark assets, such as volatility strategies and alternatives, has also proved to be critical in periods of market stress. The tilt to companies with higher ESG scores also helps build resilience during periods of heightened market volatility. It is therefore expertise in tactical asset allocation, our broad toolkit for implementation, and the team’s strong focus on ESG that has resulted in a proven track record of minimising losses during periods of heightened market volatility. We saw this again clearly in Q1 2020, where the fund significantly outperformed its risk benchmark and its peer group, achieving its performance target of delivering top quartile EUR Moderate Allocation – Global Morningstar sector performance.

In the current market what are your preferred over weights and under weights and why and what is the outlook for multi-asset classes in 2021?

We continue to see developed market economic activity restart at a faster scale than expectations, and despite growing concerns surrounding the emergence of secondary waves of Covid 19 across many nations, pandemic related fatality and hospitalization rates remain lower than those observed in March 2020.

Additionally, we do not believe the recent increase in cases in Europe will warrant a full return to national lockdowns, and similarly, in the U.S, the direction of travel still points to increased mobility (despite a slowdown in recovery in states where infection rates have spiked up). The combination of both fiscal and monetary actions in both regions appears to be cushioning the virus impact on the economy to some degree.

Nevertheless, the forthcoming U.S election is bound to have significant implications for markets due to potential shifts in fiscal stimulus, taxation, public investment as well as foreign affairs policy in the event of a Biden led win. The Coronavirus pandemic has created historically challenging circumstances for the election including a mail-in voting process that can delay results. Despite the differences in priorities of presidential candidates, we see the risk of a contested election as the biggest risk to financial markets in the short term. Naturally the recent positive test for Covid-19 for both the President and First Lady add further uncertainty around the election.

Across our portfolios, we remain moderately bullish but continue to diversify across quality, hedging and protection strategies given the potential for increased uncertainty as we draw closer to the U.S. election and the deadline for Brexit; markets are seeking confirmation of a trade deal between the UK and the EU but volatility in Sterling is likely to remain a feature in the interim.

IMPower-awards banner winners announced

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