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BlackRock has launched the BlackRock Global Funds (BGF) Dynamic High Income Fund

BlackRock has launched the BlackRock Global Funds (BGF) Dynamic High Income Fund (the Fund), which seeks to broaden income sources for investors at a time when finding attractive traditional income has been a challenging task.

Managed by Michael Fredericks, Justin Christofel and Alex Shingler of BlackRock’s Multi-Asset Income Investing team, who oversee over $30 billion of assets, the Fund seeks to deliver consistent, high income and attractive total return through asset classes complementary to traditional income investments. These asset classes include global REITs, preferred stocks, floating rate loans, mortgage-backed securities and equity covered call options, which are often more difficult for investors to access and manage.

Employing a flexible approach to asset allocation, the Fund seeks a balance between consistent, high-income and attractive total return, while managing risk relative to a 70% equity / 30% bond risk benchmark. This strategy was first launched in the US as a 1940 Act mutual fund in November 2014.

Income generation continues to be a primary objective for investors, but many traditional fixed income yields are mere shadows of their pre-crisis levels, making it difficult for investors in pursuit of income. Significant investor inflows into traditional income assets – such as high yield bonds and dividend paying stocks – in recent years mean that investors may need to diversify further to enjoy the yields they seek.

Michael Fredericks, Lead Portfolio Manager of the BGF Dynamic High Income Fund and Head of Income Investing for Multi-Asset Strategies at BlackRock comments: “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.”

Michael Gruener, Head of EMEA Retail at BlackRock, comments: 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.

Next Finance February 2018



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