The Blackrock Global Funds (BGF) Dynamic High Income fund will be managed by Michael Fredericks, Justin Christofel and Alex Shingler of the multi-asset income investing team. They currently oversee $30bn (£22bn) of assets.
The firm said that the fund seeks to deliver consistent, high income and attractive total return through asset classes complementary to traditional income investments. These include global real estate investment trusts (Reits), preferred stocks, floating rate loans, mortgage-backed securities (MBS) and equity covered call options.
Fredericks, lead portfolio manager and head of income investing for multi-asset strategies, said: “With yield hard to come by in today’s investment landscape, it is important for investors to look beyond their usual sources of income.
“We see attractive opportunities across less traditional income asset classes, whose correlation to conventional stocks and bonds is typically quite low. Investors can benefit from this unique multi-asset strategy for attractive, diversifying sources of income.”
Blackrock said that it will employ a flexible approach to asset allocation, while managing risk relative to a 70% equity/30% bond risk benchmark. This strategy was first launched in the US as a mutual fund in November 2014.
Michael Gruener, head of EMEA retail at Blackrock, said: “In today’s ‘low for longer’ interest rate environment, finding attractive income is no longer as easy as it once was. As traditional income sources become more crowded, investors are seeking new sources of income that complement what they already own.
“The BGF Dynamic High Income fund provides investors with the high level of income they are looking for while offering exposure to less commonly held, complementary income producing asset classes.”
Blackrock launched a fixed-term high yield bond fund last week, investing primarily invests in US dollar denominated high corporate bonds with five-year maturities.
