BlackRock has launched emerging markets short duration bond fund as investors seek to access asset classes with higher return potential, while aiming to mitigate interest rate risk.
The combination of short duration bonds and emerging markets, aims to provide investors with higher yields, while helping to provide some downside protection from steady interest rate increases.
The BlackRock Emerging Markets Short Duration Bond fund invests in a diverse range of short duration bonds across different sectors and countries globally. The fund has the flexibility to allocate between sovereigns, corporates and local currency bonds with an average duration of no more than three years.
Sergio Trigo Paz will be the lead portfolio manager, with Michal Katrencik and Michal Wozniak as co-managers. They will work alongside BlackRock’s 19-strong emerging market debt (EMD) team. The team implements a proven investment process, based on scenario analysis and an innovative thematic approach and oversees $24bn in EMD assets globally.
Sergio Trigo Paz, global head of BlackRock’s Emerging Markets Fixed Income team said: “Emerging market debt is increasingly being used by investors as a long term strategic allocation due to improving fundamentals and strong diversification benefits. This fund is a great addition to the range we have built, to help investors achieve greater income potential and diversification from a higher-yielding asset class.”
The BlackRock Emerging Markets Short Duration Bond fund is a sub-fund of BlackRock Strategic funds.