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Investing in sustainability without compromising returns during volatile times
The BlackRock ESG Multi-Asset Fund can score a double win for investors seeking returns and alignment with ESG principles
Leveraging BlackRock’s global expertise in asset management and sustainable investing, the BlackRock ESG Multi-Asset Fund offers investors the opportunity to score well in terms of returns as well as sustainability. PHOTO: GETTY IMAGES
The deepening energy crisis has cast a spotlight on energy security, adding a new dimension to growing pressure on businesses to improve their ESG (Environmental, Social, and Governance) performance.
Across the world, companies are required to disclose not just their carbon footprint, but also other ESG data, such as employee diversity and executive compensation, on the back of a tectonic shift towards sustainability.
Consumers, investors, regulators and other stakeholders are now paying greater attention to whether a company manages its business in a responsible way.
There is now evidence of a repricing of assets across the board as investors recognise that ESG metrics can be key drivers of risk and return, and most of this “repricing” has yet to happen, says Mr Geir Espeskog, Head of Wealth for BlackRock Southeast Asia.
He notes that more sustainable companies are generally being rewarded with a lower cost of capital than their counterparts. Companies that fare better on ESG metrics could, for instance, have lower cost of debt, which could mean more attractive returns for shareholders.
Leveraging BlackRock’s global expertise in asset management and sustainable investing, the BlackRock ESG Multi-Asset Fund offers investors the opportunity to score well in terms of returns as well as sustainability.
Multi-asset investing strategy
While the likes of the Russia-Ukraine conflict and high inflation levels have led to poor returns in financial markets across key asset classes, diversification, coupled with flexible allocation, has proved to be a successful approach to spread risk and seize opportunities during these uncertain times.
In the case of the BlackRock ESG Multi-Asset Fund, its dynamic allocation and ability to invest in “diversifying assets” – such as clean energy and social housing alternatives, gold and hedging strategies – can help it adapt to changing markets, limit the downside in the short term and allow investors to gain exposure to compelling longer-term structural opportunities.
For example, the fund’s thematic equity baskets provide exposure to long-term structural themes that will be key drivers of financial returns in the post- pandemic world, including digitalisation, consumer spending trends, and the rise in ESG momentum.
Competitive returns
The BlackRock ESG Multi-Asset Fund has outperformed its peers over multiple time periods, displaying its ability to strike a stronger balance between upside capture and downside protection.
Compared with its peers, the fund has achieved better risk-adjusted returns over the past three years. The fund has also consistently been placed in the first quartile ranking by Morningstar for its strong performance, which explains why it is the fastest-growing fund in its Morningstar peer group, with total assets under management at US$6.96 million (S$9.94 million) as at August 2022.
To achieve the maximum outcome for every dollar invested, the BlackRock ESG Multi-Asset Fund adopts a “best-in-class” approach. The fund also uses exclusionary screens that align with the latest global regulatory requirements for ESG-oriented strategies.
Mr Conan McKenzie, co-portfolio manager of the BlackRock ESG Multi-Asset Fund, says: “Looking ahead, the fund is looking to capture opportunities relating to solving two issues that have come into great focus this year – energy and food security.”
He adds that the fund will also continue to incorporate technological innovation as a long-term investment theme.
Find out more at blackrock.com/sg/esg
1The figures shown relate to past performance. All financial investments involve an element of risk. Therefore, the value of your investment and the income from it will vary and your initial investment amount cannot be guaranteed. Indexes are unmanaged and one cannot invest directly in an index. Source: BlackRock/Morningstar as at Aug 31, 2022. Performance shown above on NAV to NAV basis for the BlackRock Global Funds (BGF) ESG Multi-Asset Fund A2 EUR share class shown net of fees, formerly known as BGF Flexible Multi-Asset Fund prior to March 25, 2019. Volatility is calculated by measuring the annualised standard deviation. Morningstar Peer Group average performance demonstrated above refers to the EUR Moderate Allocation – Global sector. 2ESG ratings are determined by MSCI data 3Source: BlackRock, MSCI ESG Research, based on portfolio holdings data at Aug 31, 2022. Scores presented between 1-10 and shown both for the BGF ESG Multi-Asset Fund and the fund’s risk benchmark. A higher score represents a better ESG profile. For information only, subject to change. For explanations about the methodology, refer to ESG, controversy and carbon reporting methodology. The ratings, metrics, methodologies and scores may differ from those of other providers. Certain information ©2022 MSCI ESG Research LLC. Reproduced by permission; no further distribution. The fund’s risk benchmark 50% MSCI World/50% FTSE World Government Bond Index (hedged to EUR).
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