We're working with BlackRock to bring the first funds to our Investment Platform, read more about who they are.
Who are BlackRock?
BlackRock is the world’s largest investment manager, and looks after more than $8.67 trillion assets worldwide.
You can read more about them here: https://www.blackrock.com/uk/individual/about-us/about-blackrock
What are the BlackRock Consensus Funds?
The first funds we’re listing are from BlackRock’s consensus range of funds available through ChipAI.
These are multi-asset funds, which means BlackRock invests the money in these funds across a wide range of asset classes, industries, government bonds and geographic markets.
Additional funds available through our ChipX membership plan include the MyMap range, which are more actively managed multi-asset funds and specialist funds made up of iShares exchange traded funds and index funds, providing access to a wide investment universe of stocks, bonds, commodities and cash specific to Healthcare Innovation, Clean Energy and Emerging Markets.
Who manages the funds?
The funds are managed by the Index Asset Allocation team at BlackRock.
How actively does BlackRock manage them?
The management of the BlackRock funds varies from fund to fund.
The BlackRock Consensus funds for example are classed as ‘passive’ which helps to keep costs low while gaining exposure to a number of different asset classes through investing in smaller index funds and tracking the market.
‘Passive’ refers to the management style of the fund and the Index Allocation team at BlackRock still monitors the funds on a daily basis.
The MyMap range and Emerging Market funds are actively managed meaning a management team actively invests and makes decisions about how to invest the fund's money more closely.
Analysts and stock pickers actively research and make decisions about what the fund will invest in. Active investment management aims to outperform the market index which could mean higher returns, but with that comes increased risk.
How does BlackRock mitigate risk?
Multi asset funds help mitigate risk by diversification.
When a fund invests in different sectors or asset classes, it’s considered to be ‘diversified’. The key benefits of diversification are:
- Investments are spread over a broad range of strategies, styles, sectors and geographic regions
- Diversification can help cushion the impact of market moves which can be more severe when investing in a single asset class, and
- To enhance the potential for investing in the best-performing asset class, while reducing the impact of the worst-performing asset class.
- Investors should note that a diversified portfolio is still exposed to the risk of capital loss.
What is BlackRock’s fund management fee?
BlackRock charges a small annual percentage to manage the funds that they offer, this will vary depending on the type of fund and how actively the fund is managed. This is normally a fraction of a percent (for example they charge 0.22% for the Balanced Consensus Fund). They take this percentage from the value of your investment.
It is already taken into account when you see your returns, or the advertised average annual return (see ‘average annual return’ below). For example, if you see an 8% return, the fund will have actually grown by 8.22%, but BlackRock takes 0.22% of that growth to manage the fund, so you get an 8% return in total. It’s also true if your fund decreases in value.
For transparency, any fees taken by the fund manager will be made visible to you in your Quarterly Valuation report.
The fund management fees for the MyMap range (Expert Managed) of funds offered through ChipX are 0.17% and for the specialist funds are as follows:
- Clean Energy (iShares Global Clean Energy UCITS ETF): 0.65%
- Healthcare Innovation (iShares Healthcare Innovation UCITS ETF): 0.40%
- Emerging Markets (BlackRock Emerging Markets Fund): 0.97%
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