BlackRock Launches a new fixed income fund: BGF Euro High Yield Fixed Maturity Bond Fund 2027
10 SEPT, 2024
By Jose Luis Palmer from RankiaPro Europe
BlackRock has expanded its Fixed Maturity Products (FMP) offering in Europe with the launch of the BGF Euro High Yield Fixed Maturity Bond Fund 2027. This new fund is designed to take advantage of the current elevated yield levels, providing investors with a combination of income distribution and capital appreciation.
The Fund is structured to offer investors some predictability in cash flow and staggered interest rate exposure, appealing to those seeking steady income and capital preservation over a fixed term of three years.
Key Features of the Fund:
- Targeted Income & Capital Preservation: The Fund aims to deliver income through investments in high-yield bonds while managing risk with a balanced allocation to high-quality government bonds.
- Barbell Investment Strategy: The portfolio is divided between higher-income high-yield bonds (at least 50%) and stable government bonds for risk management, allowing the team to seek optimal credit risk/reward opportunities.
- Three-Year Investment Horizon: Designed to mature in 2027, the Fund aims to preserve capital for investors who hold units until the maturity date.
- Focus on European High-Yield Market: The strategy is specifically designed to avoid downside credit risks within the European sub-investment grade universe.
The Fund will be actively managed by Jose Aguilar, Head of European High Yield and Long Short Credit Strategies at BlackRock, who will leverage the firm's deep research capabilities in high-yield credit. The Fund operates without a benchmark constraint, giving the investment team flexibility in security selection.
As yields remain elevated, the cost of staying invested in cash is rising. Fixed Maturity Bond Funds like this one can provide visibility on income distribution while locking in today’s attractive yields. The growing dispersion in the high-yield bond market also creates potential alpha-generation opportunities for investors.
James Turner, Co-Head of European Fundamental Fixed Income at BlackRock
BlackRock’s active fixed income platform, which includes $1.1 trillion in assets under management (AUM), continues to innovate and expand its product offering to meet the evolving needs of income-focused investors.
The BGF Euro High Yield Fixed Maturity Bond Fund 2027 is poised to provide a blend of income, capital appreciation, and risk management for investors looking to capitalize on current yield conditions while mitigating downside risk.
