We have added the BlackRock Global Unconstrained Equity Fund (UK) to our Recommended list.

Snapshot

A high conviction, developed markets equity fund that is invested in companies considered to have sustainable long-term earnings power.  The managers take a long-term approach and hence, turnover is low.  Within its sector, the fund features in our 'Larger-Cap, Growth' category.

Fund Description – Key Points

• The fund is managed by the Strategic Equity Team which consists of five investment professionals, all of whom are based in London.  Alister Hibbert and Michael Constantis, who have worked together since 2008, co-manage the fund.  Mr Hibbert, Managing Director, is Head of BlackRock’s Strategic Equity Team within the Fundamental Equities division and serves on BlackRock’s Global Operating Committee.
• Messrs Hibbert and Constantis are extremely experienced practitioners and have managed both long only and long/short equity funds across a variety of market cycles.
• They have created a compact team and established a well-structured and clear process that seeks to benefit from the long-term compounding of free cash flows.
• At the heart of the investment philosophy is the belief that the market has become increasingly focused on short-term outcomes.  They believe that over long-term horizons, equity returns can be explained largely by the sustainability of a company’s return and the scale of its investment opportunity. This provides an opportunity for the long-term investor who is willing to ride out short-term noise and back exceptional businesses into the future.
• The fund is highly concentrated, featuring 20-30 stocks, with a focus on developed markets.

Characteristics & Utility

• The focus is on larger-cap, quality growth companies that have resilient earnings.  Sectors such as energy and materials, as well as regulated industries such as utilities, are typically under-represented.
• Furthermore, the fund is highly concentrated, and the managers are benchmark agnostic.  Therefore, the fund’s risk and return profile may differ meaningfully from the index and peers.
• The managers’ focus upon the sustainability of a company’s return and the scale of its reinvestment opportunity, combined with their awareness of cash flow sources and the importance of not overcommitting to companies in similar revenue systems, should mitigate some of the volatility associated with growth-styled strategies.
• The fund is suited to investors seeking a high conviction, concentrated approach to investing in best-in-class, sustainable growth businesses. Investors must have a long-term investment horizon and a tolerance for short-term volatility and bouts of under and outperformance compared to peers and global equity indices.

To view our full factsheet, please visit the fund page on our website.