BlackRock Systematic Global Equity High Income Fund
Understanding the signals that are driving tomorrow’s markets
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IMPORTANT INFORMATION:
i. BlackRock Systematic Global Equity High Income Fund seeks to generate a high level of income. The Fund invests globally, with no prescribed country or regional limits, at least 70% of its total assets in equity securities.
IMPORTANT INFORMATION:
i. BlackRock Systematic Global Equity High Income Fund seeks to generate a high level of income. The Fund invests globally, with no prescribed country or regional limits, at least 70% of its total assets in equity securities.
ii. The Fund’s investments in equities could incur significant losses due to higher fluctuation of equity values. The Fund’s income generating investment strategy may reduce the potential for capital growth and future income of the Fund.
iii. The Fund is subject to currency risk, emerging market risk, foreign investments restrictions risk, small-cap companies’ volatility and liquidity risks, securities lending counterparty risk and currency conversion risk including Renminbi denominated Classes.
iv. Class 5(G) Shares pay dividends gross of expenses. Class 6 Shares pay dividends gross of expenses and/or from capital at the Directors’ discretion. Class 8 Shares pay dividends gross of expenses and/or from capital at the Directors’ discretion and include interest rate differentials arising from share class currency hedging. Negative interest rate differentials may decrease the dividends paid. Paying dividends gross of expenses may result in more income being available for distribution; however these shares may effectively pay dividends from capital – may amount to a partial return or withdrawal of an investor’s original investment or capital gains. All declared dividends result in an immediate reduction in the NAV price of the share class on the ex-dividend date.
v. 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.
vi. 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.
vii. 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.
BlackRock Systematic Global Equity High Income Fund
By combining the power of data-driven insights, investment science, and disciplined portfolio construction, BlackRock Systematic Global Equity High Income Fund is an innovative income solution to help investors “think differently about income”.
Transforming how we see the world
Just think about how much data is out there and how it escalates rapidly. In 2022, Amazon.com saw 3.16 billion visits on average per month, while Alibaba generated over US$94 billion in e-commerce sales. And every minute of every day, we have about 97 million WhatsApp messages, and 500 hours of new videos on YouTube. And it goes on.
The funny thing is, we don’t just want data or information. Instead, we want to know what it all means, why it matters to us, and to be able to use the insights we have to predict outcomes
At BlackRock, our systematic investing platform has been doing this for over 35 years with a track record of innovation, creativity and reinvention. Our diverse team of 200+ financial professionals, academics and data scientists, blends the best of humans and machines to unlock new ways to generate differentiated outcomes
They harness cutting-edge technology such as AI and machine learning to review 800-plus data signals, assessing the fundamentals, sentiment, macro, and ESG characteristics of thousands of securities, at scale, and on a daily basis. They can then analyze and combine traditional inputs along with unconventional data sources in faster and more effective ways than any human could ever do.
So, how does this work in the real world?
Since 2007, we have been using natural language processing techniques to capture local text in the form of regulatory filings, news articles, broker reports, social media updates, and other sources to gather timely, nuanced views about a company’s outlook at scale
For example, our model can identify early investment signals by using sentiment analysis, tracking the number of positive and negative words included in a document, and assigning an overall sentiment score based on word counts.
Our approach also constantly evolves. We now apply transformer-based large language models like ChatGPT. These can process long sequences of elements – such as words in a sentence – accounting for the relationship between each individual word with other words, and focusing on the most important points.
And language is not a barrier as we can read text with 7 major languages, which allows us to get local context.
Another source of AI-led alpha might come from the physical world. Here, we can use AI as a tool to compile and analyze location-specific data – such as GPS signals from cell phones, and more to track consumer traffic. Or we can track trucking routes across a country, based on a view that heightened traffic may be a proxy for increased company fundamentals like future sales.
AI and data availability also allow us to better understand corporate intentions and macro dynamics. For example, in the US we tracked millions of online job postings to gauge the health of a company or to target future growth areas based on the skill-sets in demand. The rate of hiring can also be a proxy for activity at the company, industry, or country level.
Yet despite this outlook, machines will not take over. Human input and analysis is a critical component, and fundamental and classic information still have a major role to play. We call this a human-machine-team approach to investing.
Investing evolved
Transforming how we see the world
Watch the video to understand how we integrates big data and machine learning/artificial intelligence with human insights to select stocks and deliver income.
Why invest in the Fund?
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1. Innovative income fund powered by signals and data driven insights
The Fund uses cutting edge technology and processes to identify stocks with the potential to deliver high income with lower risk.
Recent dividend: 7.2% p.a. (A6 USD share class as of 3/28/2024 )
(A6 share class aims to pay a dividend on a monthly basis. Dividend Payment is not guaranteed. The Fund may effectively pay dividend from capital. See important information iv)2
Latest 6 months dividend table – A6 USD share class2
| Month | Annualized yield |
|---|---|
| 3/28/2024 | 7.25% |
| 2/29/2024 | 7.41% |
| 1/31/2024 | 7.55% |
| 12/29/2023 | 7.64% |
| 11/30/2023 | 7.89% |
| 10/31/2023 | 8.80% |
2. The other side of volatility is higher income potential
The Fund takes advantage of heightened market volatility to earn higher income premium in its covered calls strategy.
Analysis on vast amount of real time and alternative data enables the fund manager to potentially cut through the noise to increase accuracy and forecasting power of stock and income return.
3. Highly tactical model that focuses on the “future”
The new market regime requires agility and frequent tactical view changes with less reliance on risk models calibrated to history.
The Fund incorporates “real time” data into the signals to help navigate rapidly changing market conditions.
Systematic Investing
In today’s uncertain markets, we all need more predictable investment outcomes.
By combining the power of data-driven insights, investment science, and disciplined portfolio construction to modernize the way we invest, systematic investing is unlocking new ways to seek consistent outcomes amidst a world of unpredictability.
Systematic investing begins with data-driven insights.
In the digital age, we have access to vast amounts of data, from traditional sources like company financial statements and economic reports to more complex unstructured sources like company news stories, web traffic, social media sentiment, consumer geo-location data and even satellite imagery.
By harnessing highly sophisticated analytics techniques like machine learning and artificial intelligence, we transform this sea of raw data into useful investment information—providing insights faster, at greater scale, and with more granularity than traditional methods.
Next, we deploy rigorous scientific testing to learn if these investment insights actually have the potential to help forecast future returns.
This process includes a comprehensive examination of empirical evidence by seasoned investment experts—testing different combinations of variables and comparing the results to known outcomes. This ability to validate insights means portfolio decisions are firmly evidence-based and not dependent on human conviction alone.
Finally, when an insight is shown to be valuable, we employ a disciplined portfolio construction process to implement it. Our investment experts use computers to model the many complex trade-offs involved—finding a balance between expected return, risk, correlation and cost—to guide any allocation decisions.
At every step, the systematic process is designed to help deliver more targeted investment outcomes
Whether it’s seeking risk-managed growth through equities… generating income and maintaining ballast with bonds… integrating sustainability and ESG insights into portfolios… or accessing new sources of diversification and return with alternative strategies…
Systematic investing is unlocking new ways to navigate a world of uncertainty.
What is systematic investing?
Systematic investing, often called quantitative investing, is an investment approach that emphasizes data-driven insights, scientific testing of investment ideas, and advanced computer modelling techniques to construct portfolios.
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