BlackRock has launched a high income fund which seeks to broaden income sources for investors in a low yield environment.
The BlackRock Global Funds Dynamic High Income Fund is the latest in a flurry of income launches over the past two weeks, including by Fidelity International, Fulcrum Asset Management, and another BlackRock fund that partly focused on investors seeking income.
The latest fund invests in asset classes complementary to traditional income investments, BlackRock said, including global real estate investment trusts, preferred stocks, floating rate loans, mortgage-backed securities and equity covered call options, which are often more difficult for investors to access and manage. It will manage risk relative to a 70% equity/30% bond risk benchmark.
Many traditional fixed income yields are “shadows” of their pre-crisis levels, making it difficult for investors in pursuit of income, BlackRock said. But 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.
The fund is managed by Michael Fredericks, Justin Christofel and Alex Shingler of BlackRock’s multi-asset income investing team.
Fredericks, who is head of income investing for multi-asset strategies, said: “With yield hard to come by in today’s investment landscape, it is important for investors to look beyond their usual sources of income.”
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