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BlackRock UK Absolute Alpha
BlackRock UK Absolute Alpha aims to achieve a positive absolute return for investors on a 12 month-basis, regardless of market conditions. It is a UK equity long/short fund, meaning it can make money from falling share prices of companies, as well as rising share prices. The manager will invest in companies of all shapes and sizes.
Our opinion
Run by one of the best resourced and most experienced UK equity teams, the BlackRock UK Absolute Alpha is a very useful portfolio diversifier, with much lower volatility than the UK equity sector average. The manager has a pragmatic approach to stock selection which we like, taking the macroeconomic environment into account, as well as looking at each individual company's fundamentals.
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
BlackRock UK Absolute Alpha is managed by Nigel Ridge, who took over the portfolio in April 2013. He has been a member of the UK Equity team since 2004 and has been running long/short mandates since 2005. Prior to working at Blackrock Nigel spent six years at Schroder Investment Management.
From an early age I’ve been fascinated by numbers and after a brief flirtation with the world of engineering I found my ultimate passion was investing. After 30 years in the industry, I’m as excited as ever about the prospect of making money and if I wasn’t doing this professionally it would be an obsessional hobby!
Nigel RidgeFund manager
Investment process
Nigel aims to deliver a positive absolute return using four main strategies: long positions, short positions, pairs trades (a trading strategy which involves matching a long position with a short position in two stocks with a high correlation) and cash. He will do this by investing in both equities and contracts for differences (CFDs). Nigel aims to identify a catalyst that could unlock potential value and increase the price of a share. In contrast, for a short holding, he will look for a catalyst which will damage the share price. The extensive primary research carried out by BlackRock’s equity teams ensures that the majority of added value in the team's investment process comes from stock selection and the sharing of ideas is a key strength.
Risk
The UK Equity team take a holistic approach to risk management, leveraging BlackRock’s extensive risk resources to closely monitor concentration of stocks within portfolios. This ensures that the risk is deliberate, diversified and appropriately scaled. Each of the holdings fulfils a specific function in the portfolio, and the stocks selected complement each other so that risk and tracking error can be managed. Holdings in the fund come mainly from a range of medium and larger companies that tend to be easier to buy and sell.
The information, data, analyses, and opinions contained herein (1) include the proprietary information of FundCalibre, (2) may not be copied or redistributed without prior permission, (3) do not constitute investment advice offered by FundCalibre, (4) are provided solely for informational purposes and therefore are not an offer to buy or sell a fund, and (5) are not warranted to be correct, complete, or accurate. FundCalibre shall not be responsible for any trading decisions, damages, or other losses resulting from, or related to, this information, data, analyses, or opinions or their use. The Elite Fund rating is subjective in nature and reflects FundCalibre’s current expectations of future events/behaviour as they relate to a particular fund. Because such events/behaviour may turn out to be different than expected, FundCalibre does not guarantee that a fund will perform in line with its FundCalibre benchmark. Likewise, the Elite Fund rating should not be seen as any sort of guarantee or assessment of the creditworthiness of a fund nor of its underlying securities and should not be used as the sole basis for making any investment decision. FundCalibre disclaims any responsibility for trading decisions, damages or other losses resulting from any use of the Elite Fund rating. All performance data, as well as fund size, OCF, AMC, annual income (historic), share price discount or premium, is sourced directly from FE Analytics, and will change periodically.