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Source Investment Conference28 November 2012Philip Brides, Director and Portfolio ManagerBlackRock Multi-Asset StrategiesF...
The Investment Backdrop is Challenging       Preparing for retirement is more challenging today than 5 years ago          ...
Rethinking the investment approachInvestors have traditionally looked to benchmark strategies or focused on straight-forwa...
Investors don’t know where to turnInvestors are at an inflection point – many simply don’t know what to do  10    8       ...
Government bonds: Yields are Low … or Volatile6%                                                                          ...
Equities: too risky for many conservative investors     What if you needed cash from your equity portfolio at the end of 2...
Correlations have increased, and spiked during crisisCorrelation of European and International Stocks                     ...
Investors are turning to outcome oriented strategies                                                  Diversified         ...
What are the key building blocks of our investment philosophy?                    Our Beliefs                             ...
Using Investment Opportunities to Achieve Product Solutions               BSF Euro Dynamic Diversified Growth Fund        ...
Delivering More Consistent Performance Through Dynamic Asset Allocation                       40                          ...
Using Investment Opportunities to Achieve Product Solutions                       BGF Global Multi-Asset Income Fund    So...
Income Solution: BGF Global Multi Asset Income Fund           Fund Income Comparison (% current yield*)                   ...
Partnering With Our Clients to Reach Investment Solutions       Have you started to plan and save for retirement?         ...
Disclaimer – BGF Global Multi-Asset Income FundBlackRock Global Funds (BGF) is an open-ended investment company establishe...
Disclaimer – BSF Euro Dynamic Diversified Growth FundBlackRock Strategic Funds (BSF) is an open-ended investment company e...
DisclaimerThis material is for distribution to Professional Clients (as defined by the FSA Rules) and should not be relied...
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Blackrock's presentation on "Outcome Oriented Investing in Multi-Asset" at the PensionSource Fund Manager Conference 2012

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Blackrock's presentation on "Outcome Oriented Investing in Multi-Asset" at the PensionSource Fund Manager Conference 2012

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Blackrock's presentation on "Outcome Oriented Investing in Multi-Asset" at the PensionSource Fund Manager Conference 2012

  1. 1. Source Investment Conference28 November 2012Philip Brides, Director and Portfolio ManagerBlackRock Multi-Asset StrategiesFor professional clients / qualified investors only
  2. 2. The Investment Backdrop is Challenging Preparing for retirement is more challenging today than 5 years ago YES YES 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Have you started to plan and save for retirement? NO NO 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%Source BlackRock Survey 2012 November 2012. [Q31] How much do you agree or disagree with these statements about on retirement? Base: All respondents not currentlyretired or semi-retired (n=8,699) 2
  3. 3. Rethinking the investment approachInvestors have traditionally looked to benchmark strategies or focused on straight-forward risk profiles Emerging Equity Market Equities Income High Debt Yield Balanced Corporate Property Bonds Portfolio Absolute Commodities Government Return Bonds Cash Alternatives 3
  4. 4. Investors don’t know where to turnInvestors are at an inflection point – many simply don’t know what to do 10 8 Euphoria What next? 6 4 2 0 ? -2 -4 -6 Panic -8 1980 1985 1990 1995 2000 2005 2010 Credit Black ERM Asian Eurozone 9/11 crunch Monday crisis crisis crisis beginsSource: Credit Suisse Global Risk Appetite Index, BlackRock. Data as at 30 June 2012 For professional clients / qualified investors only
  5. 5. Government bonds: Yields are Low … or Volatile6% 5.2% 5.1% Average yield over past 20 years5% 4.8% 4.5% Yield at 30 Sep 20124%3% Government Bonds2% 1.9% 1.7% Yields are too low or volatile 1.6% for most income investors 1.4%1% 0.8%0% Germany: 10yr Japan: 10yr US: 10yr UK: 10yr Gilts Ireland 10 yr Bunds JGBs TreasuriesSource: BlackRock, DataStream, Bloomberg. Data as at 30 Sep 2012. All indices represented by 10-year government bonds for each country. Nominal yields. For professional clients / qualified investors only
  6. 6. Equities: too risky for many conservative investors What if you needed cash from your equity portfolio at the end of 2008? 160 40 28.6 140 25.5 30 20.3 Value of £100 invested in January 2000 19.6 20 120 12.7 6.5 7.5 6.9 10 Annual Return (%) 100 0 80 -1.9 -10 -8.8 60 -16.1 -20 40 -30 -29.1 20 -40 -38.5 0 -50 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 European Equities: Annual Return European EquitiesSource: BlackRock/Datastream. MSCI Europe Total Return Index, local currency. 1 January 2000 to 31 July 2012 For professional clients / qualified investors only
  7. 7. Correlations have increased, and spiked during crisisCorrelation of European and International Stocks Correlation 0.99 Markets are moving virtually 0.93 in tandem 0.89 0.81 0.73 1972-1981 1982-1991 1992-2001 2002-2011 Financial Crisis (Sep 08-May 09)Source: BlackRock, DataStream, Bloomberg. Data as at 31 December 2011. European stocks represented by the MSCI Europe Index (total return),International Stocks represented by the MSCI World Index (total return). For professional clients / qualified investors only
  8. 8. Investors are turning to outcome oriented strategies Diversified Growth Risk Factor Total Solution Return Volatility Targeting Income Targeting Tail Risk Hedging Multi Strategy Strategies are becoming more outcome oriented – clients are looking for solutions
  9. 9. What are the key building blocks of our investment philosophy? Our Beliefs Our ApproachAsset allocation is the key driver of risk and return Dynamic asset allocation • Asset classPortfolios must be well diversified Diversify through: • Time horizon • Investment vehicle Outcome oriented • Downside managementProducts must be aligned with client objectives solutions: • Income targeting 9
  10. 10. Using Investment Opportunities to Achieve Product Solutions BSF Euro Dynamic Diversified Growth Fund Genuine multi-asset strategy 1 Diversification Designed and implemented to be very market responsive 2 Flexibility Targeting consistent real returns for euro-based investors 3 Growth Accessing higher growth opportunities outside European markets 4 Global For professional clients / qualified investors only 10
  11. 11. Delivering More Consistent Performance Through Dynamic Asset Allocation 40 Credit Crunch Liquidity fuelled rally Risk on/ Risk off September 2007 – March 2009 March 2009 – April 2010 April 2010 – Present Dynamic Diversified 30 Growth Strategy 20 Cash 10 Equities Sep 2007 = 100 0 -10 -20 -30 -40 Sep 07 Mar 08 Sep 08 Mar 09 Sep 09 Mar 10 Sep 10 Mar 11 Sep 11 Mar 12 Sep 12 Cash100 Private Equity Volatility Strategies Property Hedge Funds 50 Infrastructure Commodities Non-Government Bonds Government Bonds Emerging Market Equities 0 Developed Market Equities Source: BlackRock / Datastream. BIJF I share Class, weekly returns. Cash: UK Interbank 3 Month LIBID Total Return Index. Equities: FTSE All Share Total Return Index. From 1 September 2007 to 28 Sep 2012. Phase 1: 1 Sep 2007 – 27 February 2009. Phase 2: 27 February 2009 to 31 March 2010. Phase 3: 31 March 2010 – 28 Sep 2012. Performance is cumulative. The Dynamic Diversified Growth Fund moved from weekly to daily pricing on 11 July 2012. Portfolio Positioning shown at September 2007, 2008, 2009, 2010, 2011 and 2012. For professional clients / qualified investors only 11
  12. 12. Using Investment Opportunities to Achieve Product Solutions BGF Global Multi-Asset Income Fund Solution Focus 1 Address life-cycle needs for income and capital appreciation Targeted annual gross income of 4-6% with smooth pay-out A Clear Outcome 2 available* Breadth of Universe 3 Diversification by geography, asset class, traditional, alternative Active Approach 4 Achieve tactical asset allocation and balance of risks Specialist Skill 5 Access breadth of BlackRock’s income capabilities in one fund *Targeted percentage and is not guaranteed For professional clients / qualified investors only 12
  13. 13. Income Solution: BGF Global Multi Asset Income Fund Fund Income Comparison (% current yield*) Underlying Yield Levels (%) 5.79 5.79 0 2 4 6 8 10 6 5.50 High Yield Debt 7.1 Investment Grade Bonds 5.1 5 Emerging Market Debt 7 Global Dividend Income Equities 3.8 4 Emerging Market Equities 3.7% Yield Preferred Stock 6.28 2.92 2.83 2.85 3 Loans 9.5 Italian Government Bonds 5.3 2.04 2 1.71 1.73 Equity Index Options Strategies 0.15 MLP 6.07 1 UK Commercial Property 8 Private Equity 7.06 0 Commodities 5.4 Q2 2012 Q3 2012 Oct 2012 Cash 0 BGF Global Multi Asset Income Fund Global Equities Global Bonds Asset Allocation Equity Sleeves Bond Sleeves Current Fund yield in excess of 5 percent. 26 percent of this comes from asset allocation Source: BlackRock estimated. Global Equity market income: current dividend yield. Global equities: MSCI World AC Index USD. Data as at 28 Sep 2012 Global Bonds: Barclays Capital Global Aggregate Bond Index USD Hedged Bond Income: Yield to Inception: 28 June 2012 redemption. *Fund Yield level: BlackRock estimate. Annualised. Fund Inception: 28 June 2012. For professional clients / qualified investors only 13
  14. 14. Partnering With Our Clients to Reach Investment Solutions Have you started to plan and save for retirement? NO YES 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%Source BlackRock Survey 2012 November 2012. [Q31] How much do you agree or disagree with these statements about on retirement? Base: All respondents not currentlyretired or semi-retired (n=8,699) 14
  15. 15. Disclaimer – BGF Global Multi-Asset Income FundBlackRock Global Funds (BGF) is an open-ended investment company established in Luxembourg which is available for sale in certainjurisdictions only. BGF is not available for sale in the U.S. or to U.S. persons. Product information concerning BGF should not be publishedin the U.S. It is recognised under Section 264 of the Financial Services and Markets Act 2000. BlackRock Investment Management (UK)Limited is the UK distributor of BGF. Most of the protections provided by the UK regulatory system, and the compensation under theFinancial Services Compensation Scheme, will not be available. A limited range of BGF sub-funds have a reporting fund status A sterlingshare class that seeks to comply with UK Reporting Fund Status requirements. Subscriptions in BGF are valid only if made on the basis ofthe current Prospectus, the most recent financial reports and the Key Investor Information Document, which are available on ourwebsite. Prospectuses, Key Investor Information Documents and application forms may not be available to investors in certain jurisdictionswhere the Fund in question has not been authorised.Charges from capital: Some or all of the Manager’s annual charge for the Fund is taken from capital rather than from income. Whilst thisincreases the yield, it reduces the potential for capital growth.Risk to Capital Growth through Distributions: The fund may make distributions from capital as well as income or pursue certain investmentstrategies in order to generate income. Whilst this might allow more income to be distributed, it may also have the effect of reducing capitaland the potential for long-term capital growth.Credit Risk: The fund invests in fixed interest securities issued by companies which, compared to bonds issued or guaranteed bygovernments, are exposed to greater risk of default in the repayment of the capital provided to the company or interest payments due to thefund.Emerging market risk / Emerging European market risk: Compared to more established economies, the value of investments in developingEmerging Markets may be subject to greater volatility due to differences in generally accepted accounting principles or from economic orpolitical instability.Interest Rate Risk: The fund invests in fixed interest securities such as corporate or government bonds which pay a fixed or variable rate ofinterest (also known as the ‘coupon’) and behave similarly to a loan. These securities are therefore exposed to changes in interest rateswhich will affect the value of any securities held.High Yield Bond: The fund invests in high yielding bonds. Companies who issue higher yield bonds typically have an increased risk ofdefaulting on repayments. In the event of default, the value of your investment may reduce. Economic conditions and interest rate levelsmay also impact significantly the values of high yield bonds. For professional clients / qualified investors only
  16. 16. Disclaimer – BSF Euro Dynamic Diversified Growth FundBlackRock Strategic Funds (BSF) is an open-ended investment company established in Luxembourg which is available for sale in certainjurisdictions only. BSF is not available for sale in the U.S. or to U.S. persons. Product information concerning BSF should not be publishedin the U.S. It is recognised under Section 264 of the Financial Services and Markets Act 2000. BlackRock Investment Management (UK)Limited is the UK distributor of BSF. Most of the protections provided by the UK regulatory system, and the compensation under theFinancial Services Compensation Scheme, will not be available. A limited range of BSF sub-funds have a reporting fund status A sterlingshare class that seeks to comply with UK Reporting Fund Status requirements. Subscriptions in BSF are valid only if made on the basis ofthe current Prospectus, the most recent financial reports and the Key Investor Information Document, which are available on ourwebsite. Prospectuses, Key Investor Information Documents and application forms may not be available to investors in certainjurisdictions where the Fund in question has not been authorised.Credit risk: The fund invests in fixed interest securities issued by companies which, compared to bonds issued or guaranteed bygovernments, are exposed to greater risk of default in the repayment of the capital provided to the company or interest payments due tothe fund.Interest rate risk: The fund invests in fixed interest securities such as corporate or government bonds which pay a fixed or variable rate ofinterest (also known as the ‘coupon’) and behave similarly to a loan. These securities are therefore exposed to changes in interest rateswhich will affect the value of any securities held.Property/Commodity ETFs: The fund may invest in exchange traded funds which have exposure to property securities and commodities(through an index). Property investments are subject to adverse changes in economic conditions, adverse local market conditions andrisks associated with the acquisition, financing and ownership and operation and disposal of real property. The underlying commoditiesindex may concentrate investment on selected commodity futures of multinational markets. This makes the exchange traded fundextremely dependent on the performance of the commodity markets concerned. The Fund may invest more than 10% of its Net AssetValue in the units of UCITS and/or other UCIs. For professional clients / qualified investors only
  17. 17. DisclaimerThis material is for distribution to Professional Clients (as defined by the FSA Rules) and should not be relied upon by any otherpersons.Issued by BlackRock Investment Management (UK) Limited, authorised and regulated by the Financial ServicesAuthority. Registered office: 12 Throgmorton Avenue, London, EC2N 2DL. Tel: 020 7743 3000. Registered in England No.2020394. For your protection telephone calls are usually recorded. BlackRock is a trading name of BlackRock InvestmentManagement (UK) Limited. Past performance is not a guide to future performance and should not be the sole factor of considerationwhen selecti-ng a product. All financial investments involve an element of risk. Therefore, the value of your investment and the incomefrom it will vary and your initial investment amount cannot be guaranteed.The value of investments and the income from them can fallas well as rise and is not guaranteed. You may not get back the amount originally invested. Changes in the rates of exchangebetween currencies may cause the value of investments to diminish or increase. Fluctuation may be particularly marked in the caseof a higher volatility fund and the value of an investment may fall suddenly and substantially. Levels and basis of taxation maychange from time to time. Any research in this document has been procured and may have been acted on by BlackRock for its ownpurpose. The results of such research are being made available only incidentally. The views expressed do not constitute investmentor any other advice and are subject to change. They do not necessarily reflect the views of any company in the BlackRock Group orany part thereof and no assurances are made as to their accuracy.This document is for information purposes only and does not constitute an offer or invitation to anyone to invest in any BlackRockfunds and has not been prepared in connection with any such offer. If you do not wish to receive these communications in future,please reply to this email and your BlackRock relationship manager will remove you from our mailing list.No part of this material may be reproduced, stored in retrieval system or transmitted in any form or by any means, electronic,mechanical, recording or otherwise, without the prior written consent of BlackRock© 2012 BlackRock, Inc. All Rights reserved. BLACKROCK, BLACKROCK SOLUTIONS, iSHARES, SO WHAT DO I DO WITH MYMONEY, INVESTING FOR A NEW WORLD, and BUILT FOR THESE TIMES are registered and unregistered trademarks ofBlackRock, Inc. or its subsidiaries in the United States and elsewhere. All other trademarks are those of their respective owners. For professional clients / qualified investors only

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