August, 2023
The BlackRock Diversified ESG Growth Fund recorded a negative return for August of -0.26% (after fees). A downbeat economic picture across China and Europe and broad sell-off in global government bonds weighed on market sentiment. In terms of absolute performance, growth assets realised losses across the period, namely Global Equities, Australian Equities and Emerging Market Equities. The depreciation in the Australian dollar helped offset the fall in global share prices, with the unhedged allocation to Global Equities outperforming the hedged allocation. Global Infrastructure also detracted over the month, however Global Property contributed.
The Fund’s more defensive asset classes saw mixed performance over August. Australian Fixed Income, Australian Inflation Linked Bonds and Australian Investment Grade Corporate Bonds modestly contributed, while US Inflation Linked Bonds detracted over the month. The defensive allocation to Gold contributed across the period. On the active front, the Fund underperformed its diversified benchmark over the month by -0.11% (after fees). Global Equities was the largest detractor in August, particularly via the global fundamental strategy. which was hampered by stock selection in Information Technology and Utilities. The global systematic strategy also detracted across the period. Australian Equities modestly detracted over the month, as the Australian systematic strategy underperformed due to overweights in Financials and Utilities, and poor positioning in Communication Services.
The Fund’s tactical portfolio tilts contributed to active returns in August, while the global macro strategy which takes overweight and underweight positions across asset classes and regions (i.e. tactical asset allocation) was roughly flat over the month. Global Property and Global Infrastructure were additive while active returns for Global High Yield were roughly flat across the period. Emerging Market Equities modestly contributed, driven by the Fund’s fundamental equities strategy which benefitted from stock selection.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/blackrock-diversified-esg-growth-fund-fund-update-en-au-20.pdfJuly, 2023
The BlackRock Diversified ESG Growth Fund recorded a positive return for July of 2.15% (after fees). Markets trended higher and the global economy remained resilient despite headwinds from central banks which continued to lift policy rates. In terms of absolute performance, growth assets realised gains across the period, namely Global Equities, Australian Equities and Emerging Market Equities. Global Property and Global Infrastructure also contributed over the month. The Fund’s more defensive asset classes added to performance in July, including Australian Inflation Linked Bonds, Global High Yield Corporate Bonds, Australian Investment Grade Corporate Bonds and Australian Fixed Income. US Inflation Linked Bonds modestly detracted over the month, while the defensive allocation to Gold further contributed across the period. On the active front, the Fund modestly underperformed its diversified benchmark over the month by -0.04% (after fees). Australian Equities was the largest contributor in July, as the Australian systematic strategy benefitted from sector positioning across Materials and Financials, while machine learned Timing insights contributed.
The Fund’s global macro strategy added to alpha. This strategy takes overweight and underweight positions across asset classes and regions (i.e. tactical asset allocation). Global Infrastructure also modestly contributed while active returns for Global Property and Global High Yield were roughly flat across the period. Emerging Market Equities was the largest detractor from active returns in July, driven by the Fund’s fundamental equities strategy. Stock selection in Korea, India and China detracted, while positioning across Information Technology and Consumer Discretionary weighed on active performance. Global Equities modestly detracted over July, particularly via the global fundamental strategy, which was hampered by stock selection in Utilities and Industrials. This was partially offset via the global systematic strategy which outperformed over the period.
File:May, 2023
The BlackRock Diversified ESG Growth Fund recorded a negative return for May of -0.71% (after fees). Global markets were weaker over the month, with US debt ceiling uncertainty and softer economic data in China weighing on sentiment. In terms of absolute performance, growth assets were negative across the period, with losses driven by Australian Equities, Global Infrastructure and Global Property. Global Equities and Emerging Market Equities contributed in May from an unhedged perspective, supported by a narrow rally in mega-cap tech stocks and the depreciation of the Australian dollar.
The Fund’s more defensive asset classes detracted from performance, including US Inflation Linked Bonds, Australian Fixed Income, Global High Yield Corporate Bonds and Australian Investment Grade Corporate Bonds, as fixed income markets broadly declined. The defensive allocation to Gold added modestly over the month. On the active front, the Fund outperformed its diversified benchmark over the month by 0.10% (after fees). Emerging Market Equities was the largest contributor to active returns in May, driven by the Fund’s fundamental equities strategy.
Stock selection in Brazil and Taiwan contributed, while an overweight to Information Technology and stock selection in Healthcare were also additive. Australia Equities added to alpha, as the Australian systematic strategy benefitted from sector positioning. Global Property outperformed its underlying benchmark, primarily driven by security selection within the APAC region.
The Fund’s global macro strategy also contributed. This strategy takes overweight and underweight positions across asset classes and regions (i.e. tactical asset allocation). Global Equities detracted from alpha over May, particularly via the global fundamental strategy. A combination of stock selection in, and an underweight to Information Technology detracted the most from active returns, followed by stock selection in Consumer Discretionary. Global Infrastructure and Global High Yield also realised negative active returns across the period.
File:April, 2023
The BlackRock Diversified ESG Growth Fund recorded a positive return for April of 1.90% (after fees). Investor sentiment held steady over the month, with global markets grinding higher despite the uncertain outlook and mixed economic data. In terms of absolute performance, Growth assets realised gains across the period, with positive performance driven by Global Equities and Australian Equities. Global Property and Global Infrastructure also contributed in April. Although fixed income markets experienced intramonth volatility, the Fund’s more defensive asset classes were additive, which included Global High Yield Corporate Bonds, Australian Investment Grade Corporate Bonds and Australian Fixed Income.
The defensive allocation to Gold and Cash further contributed over the month. On the active front, the Fund outperformed its diversified benchmark over the month by 0.04% (after fees). The Fund’s global macro strategy (implemented through the BlackRock Tactical Opportunities Fund) was the largest contributor to active returns in April. This strategy takes overweight and underweight positions across asset classes and regions (i.e. tactical asset allocation). Australia Equities added to alpha, particularly via the Australian systematic strategy (implemented through the BlackRock Australian ESG Alpha Tilts Fund). Gains came from a number of sectors, including Materials and Financials, while overweights in Real Estate and Industrials further contributed. Global Property also outperformed its underlying benchmark, primarily driven by security selection within the Americas region, namely US Healthcare and Consumer REITS although partially offset by Industrials.
Global High Yield contributed while Global Infrastructure was relatively flat across the period. Emerging Market Equities detracted from alpha, driven by the Fund’s fundamental equities strategy (implemented through the BGF Emerging Market Sustainable Equity Fund). Stock selection within China and Taiwan and an underweight to Saudi Arabia weighed on active returns. Global Equities also modestly underperformed.
File:March, 2023
The Fund employs BlackRock’s climate-aware capital market assumptions, or long-term estimates of asset class expected return and expected risk, as a key input into the portfolio’s design. This enables the manager to incorporate its assessment of the expected impact of climate change on asset classes into the Fund’s strategic asset allocation process. The Fund’s investment strategy accesses various asset classes by investing in other pooled investment vehicles (Underlying Funds), including those managed by us or other entities within the BlackRock Group. The strategy invests across a range of active and index investment strategies to construct the portfolio’s strategic asset allocation. Each active strategy utilises a disciplined approach to investing that aims to add value over the strategic allocation, whilst controlling risk. In addition to long only active funds, Underlying Funds may also include exposure to a diversified range of absolute return strategies seeking the Fund’s overall performance objective. The selection of an Underlying Fund for inclusion in the strategy is the result of a comprehensive due diligence process. The assessment of ESG considerations is considered in the due diligence process for selection of Underlying Funds.
File:February, 2023
The BlackRock Diversified ESG Growth Fund recorded a negative return for February of -0.72% (after fees). Markets sold off over the month and investors faced several headwinds as strong economic data drove a repricing higher in interest rates. In terms of absolute performance, the Fund’s more defensive asset classes, namely Australian Inflation Linked Bonds, US Inflation Linked Bonds, Australian Fixed Income and Global High Yield, experienced losses as the sharp rise in rates saw bond prices fall. The defensive allocation to Gold also detracted. Growth assets declined over the period, including Australian Equities, Global Equities and Emerging Market Equities. The depreciation in the Australian dollar helped offset the fall in global share prices, with the unhedged allocation to Global Equities outperforming the hedged allocation.
Global Property realised gains over the month, while Global Infrastructure was relatively flat. On the active front, the Fund outperformed its diversified benchmark over the month by 0.42% (after fees). Global Equities was the largest contributor to active returns over February, driven by active positioning within the Fund’s allocation to global systematic equities (implemented through the BlackRock Sustainable Advantage World Equity Fund). The Sentiment complex, generic momentum and revisions signals delivered robust results as the Fund was well positioned to take advantage of the momentum trade. Australia Equities added to alpha, particularly via the Australian systematic strategy (implemented through the BlackRock Australian ESG Alpha Tilts Fund). Gains came from a number of sectors, including overweights in Consumer Discretionary (hotels, restaurant and leisure) and Real Estate (office REITs). Overweights in Financials (capital markets, insurance, and services) were also additive. Global Property also outperformed its underlying benchmark, primarily driven by the APAC region given an overweight to Australian Communications which benefited from strong earnings and a positive tenant outlook. Global Infrastructure and Global High Yield were relatively flat across the period. The Fund also 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 recorded positive active returns over the month.
File:December, 2022
The BlackRock Diversified ESG Growth Fund recorded a positive return for the quarter of 5.22% (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 modestly outperformed its diversified benchmark over the quarter by 0.01% (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.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/blackrock-diversified-esg-growth-fund-fund-update-en-au-19.pdfNovember, 2023
The BlackRock Diversified ESG Growth Fund recorded a positive return for November of 3.29% (after fees). Global markets rallied over the month with broad-based gains across asset classes amid speculation that monetary tightening by central banks has begun to moderate. Investor sentiment was further supported by policy developments in China regarding their zero-COVID stance and softer inflation data across key economies. Performance was led by growth assets over the period, driven by Australian Equities, International Equities and Emerging Market Equities. Global Infrastructure realised modest gains in November. The Fund’s more defensive asset classes, namely Australian Inflation Linked Bonds, US Inflation Linked Bonds, Global High Yield and Australian Fixed Income, also outperformed over the month.
The defensive allocation to Gold modestly contributed to the Fund’s performance. On the active front, the Fund underperformed its diversified benchmark over the month by -0.99% (after fees). Stock selection within Global Equities, Emerging Market equities and Australian equities detracted from active returns over November. Global Property also underperformed its underlying benchmark, while Global Infrastructure and Global High Yield were relatively flat 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 substrategy recorded positive active returns over the month.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/blackrock-diversified-esg-growth-fund-fund-update-en-au-18.pdfOctober, 2022
The BlackRock Diversified ESG Growth Fund delivered strong returns of 4.3% (estimated, after fees), outperforming the benchmark slightly over the month. An improvement in investor sentiment saw both growth and defensive assets outperform over the month. Despite the inflationary backdrop, speculation of a potential dovish pivot by global central banks led to a recovery in risk appetites. Performance was led by Growth assets including Australian and International Equities over the period. Global Infrastructure, Global Property and Australian bonds also had positive return contributions over the period. Defensive allocation to Gold detracted from the fund’s return over the period. The Active return for the fund was +0.3% (estimated, after fees) over the period. Active performance within Emerging equities supported the performance while global equities underperformed the underlying benchmarks over the period.
The Global High Yield allocation had a positive active return contribution to the fund. 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 also had positive active returns over the month. On the other hand, Global infrastructure and Global Property underperformed compared to the benchmark over the period.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/blackrock-diversified-esg-growth-fund-fund-update-en-au-17.pdfSeptember, 2022
The BlackRock Diversified ESG Growth Fund recorded a negative return for the quarter of -1.63% (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, International Property and Global Infrastructure, declined over the period. Australian Equities realised modest gains across the quarter. The Fund’s more defensive asset classes, led by US Inflation Linked Bonds and Australian Inflation Linked Bonds, also underperformed. The defensive allocation to Gold 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 Australian Equities and Global Infrastructure also contributed over the quarter, while Global High Yield and Global Property were relatively flat compared to the benchmark. 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 also contributed over the quarter. Tactical underweight positions to US and European fixed income added to active returns.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/blackrock-diversified-esg-growth-fund-fund-update-en-au-16.pdfAugust, 2022
The BlackRock Diversified ESG Growth Fund dropped by 1.1% (after fees), outperforming the benchmark slightly over the month. In August, both growth and defensive assets underperformed as markets experienced substantial volatility amid hawkish central bank rhetoric. Growth assets including International Equities and International Property declined over the period. On the other hand, Australian Equities and Emerging Market Equities gained. 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 month. The defensive allocation to Gold detracted from the fund’s return. The Active return for the fund was +0.2% (after fees) over the period. Active performance within Australian equities supported performance while stock selection in emerging equities underperformed the underlying benchmarks over the period. Global infrastructure was relatively flat compared to the benchmark over the period while the investments in global property had a positive active return. The Global High Yield allocation had a positive active return contribution to the fund. 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 also had positive active returns over the month.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/blackrock-diversified-esg-growth-fund-fund-update-en-au-15.pdfJune, 2022
The S&P/ASX 300 Accumulation Index detracted by -12.2% over the quarter, and by -9.0% over June, underperforming most other developed markets amid ongoing uncertainty around the domestic inflation and policy outlook. The Reserve Bank of Australia (RBA) increased the cash rate by 75bps over the second quarter, with further hikes expected in the coming months. There are initial signs of increasing wage growth in Australia after a decade of low growth, with a growing share of businesses reporting larger wage payouts amid a tightening labor market.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/blackrock-diversified-esg-growth-fund-fund-update-en-au-14.pdfMay, 2022
The BlackRock Diversified ESG Growth Fund declined -2.18% over the month (after fees), behind its diversified benchmark which detracted -1.49%. Virtually all asset classes declined in May as result of high inflation rates, hawkish central bank rhetoric and slowing global growth. Growth assets including Australian Equities, International Equities, Emerging Market Equities and Global REITs detracted over the period. The Fund’s more defensive asset classes including Australian Inflation Linked Bonds and US Inflation Linked Bonds also underperformed over the period. Australian Fixed income and Global High Yield somewhat recovered after previous months of volatility, however finished slightly in the red. International Property continued to add to Fund performance over the month with Emerging Market Debt also experienced positive returns. The defensive allocation to Gold also contributed negatively to overall performance.
Looking at active returns, the Fund slightly underperformed its diversified benchmark over the period (after fees). Stock selection in Australian equities and International Equities detracted and offset active returns over the period. 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 was relatively flat over the month. Tactical underweight positions to US Equities (relative to other regions) and sector allocations were key contributors to active returns. Furthermore, the sub-strategy’s underweight position to US bonds (relative to other regions) also added to active returns as US yields repriced higher over the month.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/blackrock-diversified-esg-growth-fund-fund-update-en-au-13.pdfMarch, 2022
In Australia, the S&P/ASX 300 Accumulation Index recorded positive performance of 2.1% over the quarter. Energy, Consumer Staples, Utilities and Materials performed best, whilst growth sectors continued to detract. The Reserve Bank of Australia (RBA) continued to hold the cash rate at 10 basis points, however, noticeably shifted its tone by noting that inflation had picked up and was likely to rise further. The unemployment rate fell to a 13 year low of 4.0% with an uptake in full-time positions, however wage growth, a focus for the RBA, continues to remain weak in real terms. The lifting of Omicron related restrictions resulted in a rise in the Markit Manufacturing PMI, driven by purchasing activity, easing supply chain disruptions and higher employment levels. Gains in house prices continued to decelerate with the latest 0.3% month-over-month rise being the lowest since late 2020
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/blackrock-diversified-esg-growth-fund-fund-update-en-au-12.pdfFebruary, 2022
In Australia, the S&P/ASX300 Accumulation Index gained 2.1% in February, outperforming most other developed markets. Earning expectations were stronger than expected given recent volatility, with Energy and Utilities driving the positive returns over the month. The rotation out of ‘growth’ stocks was evident once more over the period, with the IT sector detracting 6.9%.
The easing of Omicron related restrictions resulted in a rise in the Markit Composite PMI to an eight-month high of 55.9 in February, driven by private sector output, demand and higher employment levels. Whilst the January unemployment rate was unchanged at 4.2%, the participation rate rose to 66.2%, a near all-time high. The Reserve Bank of Australia (RBA) announced to maintain its cash rate at 10 basis points and continue to expand their balance sheet, albeit with a more hawkish sentiment as supply-demand imbalances continue to put upward pressure on prices. Gains in house prices continued to decelerate with the latest 0.3% month-over-month rise being the lowest since late 2020.
The BlackRock Diversified ESG Growth Fund declined -1.70% over the month (after fees), behind its diversified benchmark which detracted -1.53%. Most asset classes declined in February as markets experienced substantial volatility given the ongoing conflict between Russia and Ukraine. Growth assets including International equities, International Property and Emerging market equities sold off meaningfully over the period. The Fund’s more defensive asset classes, including Australian Fixed Income also performed negatively over the month, but to a lesser extent. Australian equities were relatively resilient over the period and supported Fund returns. The defensive allocations to US Inflation Linked Bonds and Gold acted as useful diversifiers and contributed positively to overall performance given the higher inflationary environment and gold’s safe haven status during periods of high uncertainty.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/blackrock-diversified-esg-growth-fund-fund-update-en-au-11.pdfJanuary, 2022
In Australia, the S&P/ASX300 Accumulation Index declined by -6.5% in January, underperforming most other developed markets. Energy and Utilities fell the most over the month.
The Consumer Price Index (CPI) rose to 3.5% in December, driven by increased prices for new dwellings and automotive fuel. On the other hand, the Producer Price Index (PPI) rose to 3.7%, indicating some of the production costs are being consumed by businesses. The Reserve Bank of Australia (RBA) announced to maintain its cash rate at 10 basis points and continue to expand their balance sheet, though would reassess their position in February. The RBA commented on the economy’s recovery from the previous Delta outbreak leading to a strong labour market and comparative low levels of inflation to other developed nations, though will remain prepared to act once inflation is sustainably within the 2-3% target range.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/blackrock-diversified-esg-growth-fund-fund-update-en-au-10.pdfDecember, 2021
In Australia, the S&P/ASX300 Accumulation Index recorded positive performance of 2.2% over the quarter. Materials, Utilities and Real Estate performed best, while Energy, Technology and Financials fell as inflationary pressures and peaking COVID-19 cases dampened sentiment. The GDP print for Q3 came in negative (down 1.9% but roughly in line with expectations), reflecting a significant fall in consumption due to lockdowns over the period. The consumer confidence index fell by 1% in December with ongoing concerns around COVID-19 and inflation dominating headlines. Changes to the serviceability buffer have also slowed down the pace of house price growth to 1% in December. Unemployment declined meaningfully to 4.6% in November, while the participation rate jumped on the back of easing pandemic restrictions. Despite coming out of an extended lockdown and slowdown in activity, the RBA made no changes to its monetary policy in December. However, markets have started to price in rate hikes in 2022.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/blackrock-diversified-esg-growth-fund-fund-update-en-au-9.pdfNovember, 2021
The BlackRock Diversified ESG Growth Fund gained 0.85% over the month (after fees), slightly behind its diversified benchmark which gained 1.14%. Asset classes recorded mixed performance in November. Most growth assets including Australian equities and international equities (hedged) detracted from total returns as markets experienced volatility towards the end of the month after the emergence of the Omicron variant. The Australian dollar depreciated meaningfully in November, which boosted returns from the unhedged international equity exposures in the portfolio. The Fund’s more defensive asset classes generally recorded positive performance. US inflation-linked bonds, Australian government bonds and gold gained alongside the Fund’s global infrastructure and REITs allocations. Global high yield securities detracted from performance over the month.
Looking at active returns, the Fund underperformed its diversified benchmark over the period (after fees). On the positive side, security selection in global REITs generated positive active returns. On the flipside, security selection in Australian, international and emerging market equities detracted and offset active returns over the period. Within fixed income securities, positioning in short-term and long-term Australian government bonds detracted as did allocations to US inflation-linked bonds. The Fund invests in a global macro strategy that takes long and short positions across asset classes and regions. This sub-strategy was the largest positive alpha source over the month. Tactical overweight positions to Australian bonds (relative to other global bonds) were a material contributor as the October sell-off was reversed in November and Australian yields repriced lower over the month.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/blackrock-diversified-esg-growth-fund-fund-update-en-au-8.pdfOctober, 2021
The BlackRock Diversified ESG Growth Fund declined -0.47% over the month (after fees), behind its diversified benchmark which gained 0.24%. Asset classes recorded mixed performance in October. Most growth assets, including Australian equities, international equities and global REITs showed positive performance and added to total returns. On the flipside, emerging markets (EM) equities detracted. The Fund’s more defensive asset classes also recorded mixed performance. US inflationlinked bonds gained in October, whilst Australian and global government bonds and gold declined. Global high yield securities and EM debt finished the month roughly flat.
Looking at active returns, the Fund underperformed its diversified benchmark over the period (after fees). On the positive side, security selection in Australian and Emerging Market equities generated positive active returns, along with positive contribution from the Fund’s infrastructure component. On the flipside, selection in global and domestic fixed income securities detracted and offset active returns over the period. Within fixed income securities, positioning in short-term and long-term Australian government bonds detracted as did allocations to emerging market bonds. The Fund invests in a global macro strategy that takes long and short positions across asset classes and regions. This sub-strategy was the worst performer over the month. Tactical overweight positions to Australian bonds (relative to other global bonds) were a material underperformer as a spike in volatility in rate markets towards the end of October resulted in Australian yields repricing significantly higher over the month.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/blackrock-diversified-esg-growth-fund-fund-update-en-au-7.pdfSeptember, 2021
United States
US equities represented through the S&P 500 Index gained 0.6% over the quarter, despite September’s sell-off when the S&P 500 index declined 4.7%. Higher yields, concerns around slowing economic growth and developments in China all weighed on risk sentiment over the month. In terms of sectoral moves, technology stocks underperformed whereas banks benefited from higher yields, and energy prices drove sensitive sectors higher.
Europe
European equity markets represented through the Euro Stoxx 600 Index closed modestly flat over the quarter. The energy sector was one of the strongest performers, with information technology also seeing a robust advance.In terms of policy, the European Central Bank (ECB) decided to reduce the pace of asset purchases under its pandemic emergency purchase program (PEPP) for the fourth quarter, as expected. The ECB upgraded its growth and inflation forecast for 2021, however in contrast to global peers, the narrative was that the rise in inflation is mostly transitory and that it would tolerate any moderate and transitory overshoot of its 2% inflation target. Preliminary data for September Euro Area inflation brought Core YoY inflation to 1.9%, in line with expectations.
Australia
In Australia, the S&P/ASX300 Accumulation Index recorded positive performance of 1.8% over the quarter, despite a large part of the Australian population being in lockdown throughout this period. Progress on the domestic vaccine rollout and an improved outlook around the path out of lockdowns helped investor sentiment. GDP for Q2 was better than expected due to stronger consumer spending, with 0.7% rise in the quarter bringing GDP growth over the year to 1.4%. However, Q3 GDP is likely to be negatively impacted by COVID restrictions with a slowdown in retail sales alongside iron ore prices falling by as much as 40% across the quarter as a result of weaker expected demand for steel and the downturn in the Chinese property sector. House prices continued to increase, bringing house price growth to 17.6% for the year as record low interest rates and a limited supply of stock have underwritten demand
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/blackrock-diversified-esg-growth-fund-fund-update-en-au-6.pdfAugust, 2021
The BlackRock Diversified ESG Growth Fund gained 1.64% in August (after fees). This brings the Fund’s year-to-date return to +12.30% (after fees), slightly behind its composite benchmark. Growth assets, including Australian and international equities and REITs continued to advance and drove the Fund’s overall return in August. The Fund’s more defensive asset classes (e.g. government bonds, inflation-linked bonds and gold) were relatively flat over the period.
Global equities (hedged in AUD) gained over 2.5% in August, which brings year-to-date performance to almost 20%. Regionally, developed market equities continued to outperform their emerging market counterparts, led by the US. Corporate earnings results were encouraging, with several large US and European companies reporting strong profits and announcing large dividend payCBDM0921A/S-1843050-1/3 outs. Japanese equities bounced back strongly in August, following declines in the previous months. Emerging market equities initially stalled amidst virus concerns and a tougher stance from Chinese regulators but rebounded to finish the month slightly higher.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/blackrock-diversified-esg-growth-fund-fund-update-en-au-5.pdfJuly, 2021
The BlackRock Diversified ESG Growth Fund gained 1.71% in July (after fees). This brings the Fund’s year-to-date return to +10.49% (after fees). Virtually all asset classes contributed positively to the Fund’s overall return this month. Growth assets, such as Australian and international equities, global REITs and infrastructure had a particularly strong month and drove the Fund’s overall return.
The portfolio’s more defensive assets, such as gold, inflation-linked bonds and other fixed income securities also contributed meaningfully to overall performance but to a lesser extent. Emerging market equities was the only asset class that detracted in July. Looking at active returns, the Fund slightly underperformed its diversified benchmark in July. Security selection in global fixed income markets contributed to the underperformance, along with negative performance from the Fund’s liquid alternative component.
The Fund invests in a global macro strategy that takes long and short positions across asset classes and regions. This sub-strategy had a tactical underweight position to global bonds (especially in the US and Germany), which weighed on performance in July as global bonds rallied. The strategy also had a small overweight position to Japanese equities which detracted.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/blackrock-diversified-esg-growth-fund-fund-update-en-au-4.pdfJune, 2021
The BlackRock Diversified ESG Growth Fund gained 6.53% over the quarter (after fees), slightly ahead of its diversified benchmark which gained 6.44%. Virtually all asset classes contributed positively to the Fund’s overall return this quarter.
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The BlackRock Diversified ESG Growth Fund gained 1.69% in May (after fees), in line with its diversified benchmark. This brings the Fund’s year-todate return to +6.62% (after fees). Virtually all asset classes contributed positively to the Fund’s overall return in May. Growth assets, such as Australian and international equities, global REITs and emerging markets equities had a particularly strong month and drove the Fund’s return. Gold also had a very strong month, after lagging somewhat earlier in the year.
In addition, the portfolio’s fixed income allocation contributed positively, with inflation-linked bonds performing better than nominal bonds. Infrastructure was the only asset class that recorded a small negative return in May. Looking at active returns, the Fund performed in line with its diversified benchmark in May as the underlying active return sources generated offsetting returns. The Fund’s liquid alternatives strategies (implemented via the Tactical Opportunities Fund and Style Advantage Fund) generated positive active returns, while stock selection in Australian and emerging markets equities detracted.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/blackrock-diversified-esg-growth-fund-fund-update-en-au-2.pdfApril, 2021
The BlackRock Diversified ESG Growth Fund gained 2.82% in April (after fees), slightly ahead of its diversified benchmark which gained 2.69%. All asset classes contributed positively to Fund performance in April. Growth assets, such as Australian and international equities, and global REITs had a particularly strong month and drove the overall return in April. The portfolio’s more defensive asset classes, such as fixed income and gold, also contributed positively over the period.
Looking at active returns, the Fund outperformed its diversified benchmark by +0.14% (after fees) in April, driven by stock selection in Australian equities and exposure to liquid alternative strategies. Within Australian equities, underweight positions to oil, gas and consumable fuel companies (relative to the benchmark) and overweights to interactive media companies generated positive active returns. The Fund’s liquid alternative allocation (implemented via the Tactical Opportunities Fund) was another highlight in April.
This strategy seeks to generate uncorrelated returns by taking long and short positions across a broad array of global assets. Positioning across global interest rate markets worked well in April and drove the outperformance in this part of the portfolio. For example, a long Australian bond position versus short German bonds added to returns. An underweight position to the US dollar also worked well, alongside overweights to peripheral European equities.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/blackrock-diversified-esg-growth-fund-fund-update-en-au-1.pdfJanuary, 2021
The BlackRock Diversified ESG Growth Fund declined slightly in January (-0.18%, after fees), roughly in line with its diversified benchmark. Australian and Emerging Market equities had a positive month and added to total returns. International equities and infrastructure assets detracted, while the portfolio’s more defensive asset classes (such as fixed income and gold) recorded flat to slightly negative returns over the period. Looking at active returns, the Fund performed roughly in line with its diversified benchmark over the month. Security selection in international equities, global REITs and fixed income markets added to active returns, while security selection in Australian equities offset performance.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/blackrock-diversified-esg-growth-fund-fund-update-en-au.pdfasset_class: Multi-Asset
asset_category: 61-80% Growth Assets - Diversified
peer_benchmark: Multi-Asset - 61-80% Diversified Index
broad_market_index: Multi-Asset Growth Investor Index
manager_contact_details: Array
ticker: BAR0813AU
release_schedule: Monthly
commentary_block: Array
factsheet_url:
Fund Update
fund_features:
BlackRock Diversified ESG Growth Fund aims to achieve superior investment performance through providing returns that exceed those of the neutral portfolio benchmark by 1.30% p.a., after fees, over rolling3-year periods. The neutral portfolio benchmark comprises portfolio of published indexes, approximately 30% of which represent interest bearing assets and 70% of which represent growth assets.
- Invests in various asset classes by investing in other pooled investment vehicles (‘Underlying Funds’), including those managed by us or other entities within the BlackRock Group.
- Primarily invests via actively managed sector funds, each of which utilizes a disciplined active approach to investment management that aims to add value and control active risk.
structure: Managed Fund