As with the UK absolute alpha fund, the European version has the ability to use Ucits III, including derivatives. The fund will invest in 50 to 100 stocks and is designed to have a lower risk profile than long-only funds.
The fund will tap into four key investment strategies with long investing, short-synthetic investing, pair trades and an ability to switch up to 100 per cent into cash. The portfolio has been paper-tested since June 12, 2008.
Devlin says: “”Investors should look on the Fund as one that aims to give returns above cash using European equities to drive these returns – but without the downside risk normally associated with ‘being in the market’. It’s a stepping stone for cautious investors who want more than cash can offer, but with contained risk.”
BlackRock’s head of UK retail business Alex Hoctor-Duncan says: ““BlackRock has an outstanding record in absolute return products, which are a valuable investment strategy in all market environments. The success and popularity of BlackRock’s UK absolute alpha fund demonstrates the high level of investor confidence in the Fund’s ability to deliver positive returns.”