BlackRock launches new fixed income fund
Fixed income investors can no longer afford to take a set and forget approach, according to BlackRock Australia head of fixed interest, Stephen Miller.
Miller claimed this week that global deleveraging and government intervention had produced a challenging new fixed income environment that was demanding a higher degree of proactivity from investors.
“In the current environment, fixed income investors cannot afford to set and forget. They now need to be proactive about managing diversification risk, credit risk and geographic risk,” he said.
Miller said that it was these factors which had prompted BlackRock to launch a new product - the BlackRock Fixed Income Global Opportunities (FIGO) fund in Australia.
He described FIGO as being a flexible global multi-sector fixed income strategy that sought to achieve a positive total return. While the fund is not tied to a benchmark, it is managed to a target return of 4-6 percent per annum above the UBS Bank Bill Index, net of fees, over rolling three-year periods.
“FIGO was established in response to investors’ desire to diversify their bond portfolios away from traditional fixed income assets, in order to counter the risk to performance presented by a rising interest rate environment over the medium term,” Miller said.
“The fund does not focus on just one area of global bond markets. Instead, the underlying investments are a result of collaboration between portfolio managers and over 150 investment specialists globally within the BlackRock group who cover corporate, sovereign, municipal and structured bonds. The underlying strategy also takes active currency positions and can have exposure to equity markets.”
Although new to the Australian market, the FIGO strategy has been in place in a US mutual fund since 2010 and has a history of attractive returns.
FIGO has a minimum investment of $50,000. The fund has no establishment fees, no contribution fees, no withdrawal fees, no switching fees and no exit fees. The annual management fee is 0.7 per cent.
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