Global Unconstrained Equity Investing

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TAP INTO GROWTH

Invests selectively in exceptional companies, seeking to deliver long-term outperformance and growth.

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IMPORTANT INFORMATION
- This fund seeks to achieve long term capital growth. The Fund invests at least 80% of its total assets in equity securities and equity-related securities (namely American Depositary Receipts (ADRs) and Global Depositary Receipts (GDRs)) of companies domiciled in, or exercising a significant part of their economic activity in, global developed markets.
IMPORTANT INFORMATION
- This fund seeks to achieve long term capital growth. The Fund invests at least 80% of its total assets in equity securities and equity-related securities (namely American Depositary Receipts (ADRs) and Global Depositary Receipts (GDRs)) of companies domiciled in, or exercising a significant part of their economic activity in, global developed markets. Investment decisions are based on company-specific research to identify and select equity securities that, in the opinion of the Investment Adviser, have a viable competitive advantage and the potential to produce attractive long-term capital growth. The Fund’s portfolio is expected to be concentrated (i.e. it is expected to hold relatively few stocks in comparison to other funds), but there is no guarantee that this will always be the case.
- The Fund's investments in equities could incur significant losses due to higher fluctuation of equity values. The Fund’s investments are expected to be concentrated in fewer stocks in larger weightings and certain global developed markets. This may result in greater volatility than more broad-based investments.
- The Fund is subject to currency risk, small/mid cap companies’ volatility and liquidity risks, and currency conversion risk including Renminbi denominated Classes.
- The Fund may use derivatives for hedging and for investment purposes. However, usage for investment purposes will not be extensive. The Fund may suffer losses from its derivatives usage.
- The value of the Fund can be volatile and can go down substantially within a short period of time. It is possible that a certain amount of your investment could be lost.
- Investors should not make investment decisions based on this document alone. Investors should refer to the Prospectus and Key Facts Statement for details including risk factors.

Great businesses dominate over decades not quarters. That is why it might be wise to look beyond the market noise, and zoom in on company fundamentals, when you are investing for the long-term.

Watch the video to find out how unconstrained equity investing can help generate long-term capital growth through identifying companies with high potential for sustainable returns.

Over the years we’ve seen the investment landscape evolve dramatically. The industry has tied itself in knots trying to make something which, at its heart should be quite straightforward, into something of astonishing complexity.

They’re trying to solve for multiple competing issues, attempting to deliver consistent alpha while also ensuring acceptable performance volatility relative to a benchmark on a quarterly or annual basis. In order to do this, investors then have to trade frequently to time economic cycles, changes in bond yields, and so on - all within statistical risk parameters. The chances of a misstep whilst trying to juggle these competing factors is astonishingly high. The greatest threat to any portfolio is the risk of being repeatedly whipsawed, and it’s precisely this that leads to so many investors buying high and selling low.

How about we simply redefine our opportunity set and just invest all our capital in the world’s best companies and then leave it there for years, and years, and years. And that’s what the global unconstrained equity fund is. We invest all the assets into those few extraordinary companies that are both great now, and which we believe are highly likely to still be great in 10 years time.

So, if long-term capital growth is the primary objective, then we should just focus on that, and ignore all the noise. We start by completely ignoring the benchmark and then - build a portfolio which adheres to the following objectives:
- Identify the rare companies that we believe have a very high likelihood of sustaining high returns for a decade and longer.
- Select a small number of them in a concentrated portfolio to maximise their impact.
- Hold them for a long time and allow them to compound for years and years.

This is what we mean by unconstrained investing. It’s a deeply fundamental, extremely simple approach designed for optimists who believe that the extraordinary opportunity set offered by equity markets could offer something better than benchmark returns. We therefore aim to invest in the winners.

Over the years we’ve seen the investment landscape evolve dramatically. The industry has tied itself in knots trying to make something which, at its heart should be quite straightforward, into something of astonishing complexity.

They’re trying to solve for multiple competing issues, attempting to deliver consistent alpha while also ensuring acceptable performance volatility relative to a benchmark on a quarterly or annual basis. In order to do this, investors then have to trade frequently to time economic cycles, changes in bond yields, and so on - all within statistical risk parameters. The chances of a misstep whilst trying to juggle these competing factors is astonishingly high. The greatest threat to any portfolio is the risk of being repeatedly whipsawed, and it’s precisely this that leads to so many investors buying high and selling low.

How about we simply redefine our opportunity set and just invest all our capital in the world’s best companies and then leave it there for years, and years, and years. And that’s what the global unconstrained equity fund is. We invest all the assets into those few extraordinary companies that are both great now, and which we believe are highly likely to still be great in 10 years time.

So, if long-term capital growth is the primary objective, then we should just focus on that, and ignore all the noise. We start by completely ignoring the benchmark and then - build a portfolio which adheres to the following objectives:
- Identify the rare companies that we believe have a very high likelihood of sustaining high returns for a decade and longer.
- Select a small number of them in a concentrated portfolio to maximise their impact.
- Hold them for a long time and allow them to compound for years and years.

This is what we mean by unconstrained investing. It’s a deeply fundamental, extremely simple approach designed for optimists who believe that the extraordinary opportunity set offered by equity markets could offer something better than benchmark returns. We therefore aim to invest in the winners.

Why unconstrained

01

Benchmark-agnostic

We avoid being constrained by artificial benchmarks that do not accurately reflect the divergence that’s seen between high and low growth businesses in today’s environment.

02

Fundamental focus

Rather than looking at factors, sector weights, country weights or near-term prospects, we focus on a company’s franchise strength and the scale of its reinvestment opportunity, which determine their long-term performance.

03

Long-term approach

We aim to give our investments the time to compound their returns while avoiding distraction of short-term opportunism.

Why BlackRock Global Unconstrained Equity Fund?

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A fresh approach to outperformance and growth

A concentrated, long-term portfolio investing in a small number of companies that can sustain and compound strong returns over long periods of time.

The fund seeks to

Identify the rare companies that can sustain high returns for a decade

Select a small number of them to maximise their stock specific impact

Allow time for companies to compound their earnings

Alpha from stock selection

Our selection criteria is driven by four key attributes that we believe indicate the potential for long-term compounding. We typically invest in 20-30 companies at any one time, which in our view, provides enough diversification to build a fundamentally resilient portfolio while taking larger position sizes to allow maximisation of stock specific impact.

We look for businesses that have:

Established market position

Non replicable franchises even with limitless amounts of capital.

Structural tailwinds

Addressable market opportunity providing a runway for future growth.

High returns

High margin businesses that re-invest cash flows and compound earnings over time.

Strong management teams

Financially conservative, well-invested, judicious management of excess cash flow to sustain franchise returns.

A leading investment team

The fund is managed by a proven alpha-generating Strategic Equity Team with proven track record. The portfolio managers, Alister Hibbert and Michael Constantis, have a combined investment experience of nearly 50 years.

The team draws on BlackRock’s global network of investment insights across both public and private markets and different asset classes, providing real-time insights from company interactions around the world. We believe this is a crucial advantage when managing unconstrained equity portfolios: it can help uncover new investment opportunities and also identify potential sources of disruption or structural change that might impact existing holdings.