BlackRock in Singapore announced on Tuesday the launch of the BlackRock Global Funds (BGF) – Dynamic High Income Fund (the Fund), which seeks to broaden income sources for Singapore investors at a time when finding attractive traditional income has been a challenging task.
Managed by Michael Fredericks, Justin Christofel and Alex Shingler of BlackRock’s Multi-Asset Income Investing team, the Fund seeks to deliver consistent, high income and attractive total return through asset classes complementary to traditional income investments.
These asset classes include global REITs, preferred stocks, floating rate loans, mortgage-backed securities and equity covered call options, which are often more difficult for investors to access and manage.
Employing a flexible approach to asset allocation, the Fund seeks a balance between consistent, high-income and attractive total return, while managing risk relative to a 70% equity/30% bond risk benchmark. This strategy was first launched in the US in November 2014.
Income generation continues to be a primary objective in Asia, but many traditional fixed income yields are mere shadows of their pre-crisis levels, making it difficult for investors in pursuit of income. Significant investor inflows into traditional income assets – such as high yield bonds and dividend paying stocks – in recent years mean that investors may need to diversify further to enjoy the yields they seek.
Michael Fredericks, head of income investing for multi-asset strategies at BlackRock, said: “With yield hard to come by today, it is important for investors to find new income sources to complement what they already own. We see attractive opportunities across less traditional income asset classes. Their correlation to conventional stocks and bonds is typically low. Investors can benefit from this unique multi-asset strategy for attractive, diversifying sources of income.”
Andrew Landman, BlackRock’s APAC head of client business, added: “Managing more than US$30bn of assets globally, Michael and his team have earned a reputation for identifying the most attractive investment opportunities in each asset class. We are delighted to deliver Dynamic High Income Fund to the benefits of investors in Singapore, with the aim of addressing their income gap challenges.”