Best performing UK funds under Rishi Sunak’s leadership
This Thursday 2nd February marks 100 days in office for Prime Minister Rishi Sunak. After the...
BlackRock Corporate Bond
This predominantly investment grade corporate bond fund combines the benefits of an experienced lead decision maker, Ben Edwards, with BlackRock's vast resources. These include specialist fixed income analysts, quantitative risk tools and a huge 24-hour global trading platform.
Our opinion
We like this fund's flexible mandate and Ben's track record of consistently exploiting inefficiencies in the fixed income market. BlackRock Corporate Bond fund has delivered excellent performance since Ben became co-manager in 2012, and subsequently lead manager in 2015. Equally impressively this has been achieved whilst taking significantly less risk than the average fund in the sector.
Company description
A part of the US-based BlackRock Group, BlackRock manages assets across equity, fixed income, cash management, alternative investment and real estate strategies. It provides this comprehensive range of products across numerous continents with more than 130 investment teams in 30 countries.
Fund manager
Having earned a business degree from the Queensland University of Technology in 2000, Ben went on to gain a post-graduate degree in finance from the Financial Services Institute of Australia in 2002. That same year, he started his investment career as an analyst at M&G. He moved to Legal & General Investment Management in 2003 and joined BlackRock in 2010. He was made co-manager of BlackRock Corporate Bond fund in 2012 and lead manager in 2015. He is also a CFA charterholder.
Hubris is the enemy of fund managers; we can’t predict the future better than anyone else. We build sensible portfolios which work whichever way the wind happens to be blowing.
Ben EdwardsFund manager
Investment process
The process behind the BlackRock Corporate Bond fund combines macroeconomic views on the wider economy with fundamental research on individual companies and the various bonds they may offer. The manager has access to BlackRock's huge resource of fixed income specialists in order to uncover the best ideas.
While the majority of bonds will be investment grade with relatively high credit ratings (meaning the company is less likely to default on the loan), this is a flexible fund and has the ability to source other ideas from asset-backed securities, high yield and unrated bonds and those denominated in euros and US dollars (although these will be hedged back to sterling). Once a company is identified as a potential investment, further work is undertaken to determine which of its bonds offers the best value.
ESG
ESG - Integrated
Blackrock’s highly resourced team has a consistent and sophisticated ESG analysis system built into the investment process. It has specific risk inputs performed by analysts, and the output is highlighted as a prominent section of the stock research template. There is a dedicated fixed income team for additional analysis relating to this space. This analysis is populated from a combination of internal work, looking through financial statements for ESG issues and the risk of specific events. This is used in conjunction with external data to flag past concerns and put a numeric score on the ESG exposures of a company. These scores are used as an input to the investment decision process, rather than to exclude certain stocks, and it is up to Ben which risks he wishes to take when building the portfolio.
Risk
This fund has support from BlackRock's sophisticated risk analytics tools, which are being continuously updated and refined. Interest rate exposure is typically less than the benchmark and, notably, the fund has been lower-risk during Ben’s tenure, when compared to its peers in the Sterling Corporate Bond sector.
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