BlackRock has introduced two new fixed income funds designed to take advantage of opportunities in the unpredictable market environment, post-financial crisis.
The BlackRock Multi-Sector Bond Fund is a diversified fixed income fund focusing on taxable securities that offer higher income than other core strategies. The BlackRock Strategic Income Opportunities Fund will invest in various securities across the fixed income universe.
“The recent credit crisis has made the fixed income market more unpredictable and difficult to navigate, but attractive market opportunities remain highly accessible to discerning investors,” said Curtis Arledge, chief investment officer of fundamental fixed income at BlackRock.
“These changes in our fixed income lineup evidence our commitment to helping advisers and their clients position portfolios to take even greater advantage of change across our marketplace,” Arledge added.
Referring to what BlackRock [BLK] terms “spread sectors,” that is, bonds trading with a yield spread over Treasuries, the CIO added: “Rates won’t rise in a straight line across all sectors, so managers who can take advantage of disparities among different assets will have an edge over managers confined to specific sectors or asset classes. Though demand for spread sectors has grown, many of the underlying securities in these sectors remain undervalued.”
Investors also need to veer away from traditional benchmarks, given the “preponderance of government-related debt” in the fixed income market today, Arledge said.