BlackRock Diversified ESG Stable Fund aims to achieve superior investment performance through providing returns that exceed those of the neutral portfolio benchmark by 0.45% p.a., after fees, over rolling 3-year periods. The neutral portfolio benchmark comprises a portfolio of published indexes, approximately 70% of which represent interest bearing assets and 30% of which represent growth assets. The Fund invests in various asset classes by investing in other managed investment schemes (‘Underlying Funds’), including those managed by us or other entities within the BlackRock Group. The Fund primarily invests via actively managed sector funds, each of which utilises a disciplined active approach to investment management that aims to add value and control active risk.
The BlackRock Diversified ESG Stable Fund recorded a positive return for Q2 2023 of 0.33% (after fees). Risk assets were mostly supported over the quarter despite the uncertain macroeconomic backdrop, although fixed income markets continued to experience volatility.
In terms of absolute performance, growth assets realised gains over the period, namely Global Equities, Australian Equities and Emerging Market Equities. Global Property also contributed in Q2, while Global Infrastructure was roughly flat.
Defensive assets were negative over the quarter, including Australian Fixed Income, Australian Inflation Linked Bonds and US Inflation Linked Bonds. Australian Investment Grade Corporate Bonds also realised losses, although Global High Yield Corporate Bonds added to performance. The defensive allocation to Gold detracted over the period.
On the active front, the Fund outperformed its diversified benchmark over the quarter by 0.25% (after fees). Australian Equities was one of the largest contributors to active returns over Q2, driven by the Fund’s systematic strategy. Most sectors contributed, led by positioning across Materials, Financials and Real Estate.
The Fund invests in a global macro strategy that takes overweight and underweight positions across asset classes and regions (i.e. tactical asset allocation). This sub-strategy meaningfully contributed over the quarter.
Emerging Market Equities added to alpha, as the fundamental strategy benefitted from stock selection in Brazil and Taiwan, although Global Equities saw muted active returns over Q2. Global Property also outperformed its underlying benchmark, while Global Infrastructure and Global High Yield modestly contributed.
What is BlackRock Diversified ESG Stable Fund BlackRock Diversified ESG Stable Fund is an Managed Funds investment product that is benchmarked against Multi-Asset Moderate Investor Index and sits inside the Multi-Asset - 21-40% Diversified Index. Think of a benchmark as a standard where investment performance can be measured. Typically, market indices like the ASX200 and market-segment stock indexes are used for this purpose. The BlackRock Diversified ESG Stable Fund has Assets Under Management of 118.42 M with a management fee of 0.71%, a performance fee of 0.00% and a buy/sell spread fee of 0.2%.
How has the investment product performed recently?
The recent investment performance of the investment product shows that the BlackRock Diversified ESG Stable Fund has returned 1.02% in the last month. The previous three years have returned 2.46% annualised and 4.1% each year since inception, which is when the BlackRock Diversified ESG Stable Fund first started.
How is risk measured in this investment product?
There are many ways that the risk of an investment product can be measured, and each measurement provides a different insight into the risk present. They can be used on their own or together to perform a risk assessment before investing, but when comparing investments, it is common to compare like for like risk measurements to determine which investment holds the most risk. Since BlackRock Diversified ESG Stable Fund first started, the Sharpe ratio is NA with an annualised volatility of 4.1%. The maximum drawdown of the investment product in the last 12 months is -1.53% and -13.88% since inception. The maximum drawdown is defined as the high-to-low decline of an investment during a particular time period.
What is the relative performance of the investment product?
Relative performance is what an asset achieves over a period of time compared to similar investments or its peers. Relative return is a measure of the asset's performance compared to the return to the other investment. The BlackRock Diversified ESG Stable Fund has a 12-month excess return when compared to the Multi-Asset - 21-40% Diversified Index of 1.15% and 0.11% since inception.
Does the investment product produce Alpha over its Peers?
Alpha is an investing term used to measure an investment's outperformance relative to a market benchmark or peer investment. Alpha describes the excess return generated when compared to peer investment. BlackRock Diversified ESG Stable Fund has produced Alpha over the Multi-Asset - 21-40% Diversified Index of NA% in the last 12 months and NA% since inception.
What are similar investment products?
For a full list of investment products in the Multi-Asset - 21-40% Diversified Index category, you can click here for the Peer Investment Report.
What level of diversification will BlackRock Diversified ESG Stable Fund provide?
BlackRock Diversified ESG Stable Fund has a correlation coefficient of 0.98 and a beta of 0.96 when compared to the Multi-Asset - 21-40% Diversified Index. Correlation measures how similarly two investments move in relation to one another. This establishes a 'correlation coefficient', which has a value between -1.0 and +1.0. A 100% correlation between two investments means that the correlation coefficient is +1. Beta in investments measures how much the price moves relative to the broader market over a period of time. If the investment moves more than the broader market, it has a beta above 1.0. If it moves less than the broader market, then the beta is less than 1.0. Investments with a high beta tend to carry more risk but have the potential to deliver higher returns.
How do I compare the investment product with its peers?
For a full quantitative report on BlackRock Diversified ESG Stable Fund and its peer investments, you can click here for the Peer Investment Report.
How do I compare the BlackRock Diversified ESG Stable Fund with the Multi-Asset Moderate Investor Index?
For a full quantitative report on BlackRock Diversified ESG Stable Fund compared to the Multi-Asset Moderate Investor Index, you can click here.
Can I sort and compare the BlackRock Diversified ESG Stable Fund to do my own analysis?
To sort and compare the BlackRock Diversified ESG Stable Fund financial metrics, please refer to the table above.
Has the BlackRock Diversified ESG Stable Fund been independently verified by SMSF Mate?
This investment product is in the process of being independently verified by SMSF Mate. Once we have verified the investment product, you will be able to find more information here.
How can I invest in BlackRock Diversified ESG Stable Fund?
If you or your self managed super fund would like to invest in the BlackRock Diversified ESG Stable Fund please contact PO Box N43, Grosvenor Place, Sydney NSW 1220 via phone 02 9272 2200 or via email ishares.australia@blackrock.com.
How do I get in contact with the BlackRock Diversified ESG Stable Fund?
If you would like to get in contact with the BlackRock Diversified ESG Stable Fund manager, please call 02 9272 2200.
Comments from SMSF Mates
SMSF Mate does not receive commissions or kickbacks from the BlackRock Diversified ESG Stable Fund. All data and commentary for this fund is provided free of charge for our readers general information.
Performance Commentary - March 31, 2023 The BlackRock Diversified ESG Stable Fund recorded a positive return for Q1 2023 of 3.54% (after fees). Major asset classes performed strongly over the first quarter of 2023 as fears of broader contagion across the banking system eased late in March.
In terms of absolute performance, the Fund’s growth assets realised gains over the quarter, namely Global Equities, Australian Equities and Emerging Market Equities. Global Infrastructure and Global Property also modestly contributed in Q1. Defensive assets were positive over the period, including Australian Inflation Linked Bonds, US Inflation Linked Bonds, Australian Fixed Income, Global Fixed Income and Global High Yield. The defensive allocation to Gold further contributed to the Fund’s performance.
On the active front, the Fund underperformed its diversified benchmark over the quarter by -0.14% (after fees). Emerging Market Equities was the largest contributor to active returns over Q1, driven by active positioning within the Fund’s fundamental allocation (implemented through the BGF Emerging Market Sustainable Equity Fund). An underweight to and stock selection in India and South Africa added to alpha.
Global Infrastructure also outperformed its underlying benchmark, driven by the EMEA region given an overweight to Eurozone Communications and Eurozone Electric Utilities. Australian Equities modestly contributed over the period.
The Fund invests in a global macro strategy (implemented through the BlackRock Tactical Opportunities Fund) that takes overweight and underweight positions across asset classes and regions (i.e. tactical asset allocation). This sub-strategy was the largest detractor over the quarter.
Global Property and Global High Yield also detracted from active returns over the period..
Performance Commentary - December 31, 2022 The BlackRock Diversified ESG Stable Fund recorded a positive return for the quarter of 3.27% (after fees). Global markets rose over the final quarter of 2022, supported by the unwinding of China’s zero-COVID policy and softer inflation data. However, growing recession fears ahead of 2023 saw both growth and defensive assets retrace gains in December. Growth assets performed strongly over the quarter, with positive performance driven by Australian Equities, International Equities and Emerging Market Equities. Global Infrastructure realised modest gains in Q4, while Global Property was roughly flat across the period.
The Fund’s more defensive asset classes, namely Australian Inflation Linked Bonds, US Inflation Linked Bonds, and Global High Yield, also outperformed over the period. The defensive allocation to Gold contributed to the Fund’s performance. On the active front, the Fund outperformed its diversified benchmark over the quarter by 0.18% (after fees). Stock selection within Global Equities and Australian equities detracted from active returns over Q4, which was partially offset by active positioning within Emerging Market equities. Global Property also underperformed its underlying benchmark, while Global High Yield contributed to alpha across the period. The Fund also invests in a global macro strategy that takes overweight and underweight positions across asset classes and regions (i.e. tactical asset allocation). This sub-strategy contributed over the quarter.
Performance Commentary - September 30, 2022 The BlackRock Diversified ESG Stable Fund recorded a negative return for the quarter of -1.79% (after fees). Over the quarter both growth and defensive assets underperformed, amidst a deteriorating global economic outlook and heightened market volatility. Central banks continued to aggressively hike rates to combat rising inflation across most major economies, which proved a headwind for most asset classes.
Growth assets, including International Equities, Emerging Market Equities and International Property, declined over the period. Australian Equities realised modest gains across the quarter. The Fund’s more defensive asset classes, led by Global Fixed Income, US Inflation Linked Bonds and Australian Inflation Linked Bonds also underperformed.
The defensive allocation to Gold modestly detracted from the Fund’s performance. On the active front, the Fund outperformed its diversified benchmark over the quarter. Stock selection within global equities, in particular Emerging Markets and International Equities, contributed to active returns over the period.
The Fund’s allocation to Global Infrastructure also modestly contributed over the quarter, while Australian Equities, and Global Property were relatively flat compared to the benchmark. Active returns were also flat from Global Fixed Income and Global High Yield. The Fund invests in a global macro strategy that takes overweight and underweight positions across asset classes and regions (i.e. tactical asset allocation). This sub-strategy contributed over the quarter. Tactical underweight positions to US and European fixed income added to active returns.
Performance Commentary - June 30, 2022 The BlackRock Diversified ESG Stable Fund declined -5.77% over the quarter (after fees), behind its diversified benchmark which detracted -5.03%. Virtually all asset classes underperformed in Q2 as result of recessionary concerns, high inflation, and tightened financial conditions. Growth assets including Australian Equities, International Equities and International Property detracted over the period. The Fund’s more defensive asset classes including Australian Fixed income, Global Fixed Income, Australian Inflation Linked Bonds and US Inflation Linked Bonds also underperformed over the quarter The allocation to Gold acted as a useful diversifier and contributed positively to overall performance given gold’s safe-haven status during periods of high uncertainty as did the Fund’s Global Infrastructure allocation given its resilience in an inflationary environment.
Looking at active returns, the Fund underperformed its diversified benchmark over the period (after fees). Stock selection in Australian and International equities detracted and offset active returns over the period. The Fund’s Global High Yield allocation contributed positively to active returns. The Fund invests in a global macro strategy that takes overweight and underweight positions across asset classes and regions (i.e. tactical asset allocation). This sub-strategy detracted over the quarter. Tactical overweight positions to European and Japanese equities, relative to other regions, were a key drag on active returns.
Performance Commentary - March 31, 2022 The BlackRock Diversified ESG Stable Fund declined -3.04% over the quarter (after fees), behind its diversified benchmark which detracted -2.67%. Most asset classes underperformed in Q1 as markets experienced substantial volatility on the back of ongoing conflict between Russia and Ukraine, inflationary concerns and global central bank activity. Growth assets including International Equities, International Property and Emerging Market Equities detracted over the period.
The Fund’s more defensive asset classes, including Australian Fixed Income, Global Fixed Income, Australian Inflation Linked Bonds, US Inflation Linked Bond and Global High Yield also detracted as fixed income markets sold off throughout the period. Australian Equities were more resilient over the period and supported Fund returns. The allocation to Gold acted as a useful diversifier and contributed positively to overall performance given gold’s safe-haven status during periods of high uncertainty. Looking at active returns, the Fund slightly underperformed its diversified benchmark over the period (after fees). Stock selection in international equities detracted and offset active returns over the period. The Fund’s Real Estate and Infrastructure allocations contributed positively to active returns, as did the Fund’s Global Fixed Income allocations.
The Fund invests in a global macro strategy that takes overweight and underweight positions across asset classes and regions (i.e. tactical asset allocation). This sub-strategy detracted over the quarter. Tactical overweight positions to Australian bonds (relative to other global bonds) was a key drag on active returns, as Australian yields repriced higher over the quarter on the back of hawkish sentiment shifts by the Reserve Bank of Australia (RBA).
Performance Commentary - June 30, 2021 The BlackRock Diversified ESG Stable Fund gained 3.42% over the quarter (after fees), slightly ahead of its diversified benchmark which gained 3.38%. Virtually all asset classes contributed positively to the Fund’s overall return this quarter. Growth assets, such as Australian and international equities, global REITs and emerging markets equities had a particularly strong quarter and drove the Fund’s return. The portfolio’s more defensive assets, such as gold and fixed income securities also contributed positively but to a lesser extent.
Looking at active returns, the Fund slightly outperformed its diversified benchmark over the period (after fees). Security selection within Australian equities worked well and generated positive active returns. For example, underweight positions in oil & gas and airlines versus overweights in commercial services companies and real estate added to performance. Security selection in global infrastructure assets was also additive, along with positive contribution from the Fund’s liquid alternative strategies. On the flipside, stock selection in international equities detracted and offset active returns over the period.
Performance Commentary - December 31, 2020 The BlackRock Diversified ESG Stable Fund recorded a strong quarter and gained 3.10% (after fees), while its diversified benchmark gained 3.51%. This brings the Fund’s total return for the 2020 calendar year to +2.82% (after fees), in line with its diversified benchmark. The Fund’s exposure to Australian and international equities contributed the most to total performance in the fourth quarter of 2020, while exposures to listed infrastructure, global REITs, Emerging Market debt and credit also contributed positively.
The portfolio’s more defensive exposures (e.g. developed market government bonds) recorded relatively flat performance over the period. Looking at active returns, the Fund underperformed its diversified benchmark this quarter. The underperformance in the fourth quarter of 2020 was driven by security selection in Australian equities, along with negative returns from the Fund’s liquid alternative allocation (style premia). The other active return sources recorded relatively muted performance over the quarter.
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