Share Classes Explained

At BlackRock, we offer a diverse range of funds and share classes to help you meet your investment goals and income needs. Share classes are classified as distributing and accumulating share classes with varying distribution policy, and denominated in different currencies, hedged or unhedged against the fund’s base currency.

The key differences of the various types of share classes based on their distributing policy are set out below:

Share type e.g. Paid Calculated Calculation basis Gross/Net of expenses Stable distributing
Distributing(D) A1 Monthly Daily Income for the current day Net/Gross* No
Accumulating A2 - - N/A, income and gains are reinvested into the Fund - -
Distributing(M) A3 Monthly Monthly Income for the preceding 1 month Net/Gross* No
Distributing(A) A4 Annually Annually Income for the preceding 12 months Net/Gross* No
Distributing(Q) A5 Quarterly Quarterly Income for the preceding 3 months Net/Gross* No
Distributing(S) A6 Monthly Monthly Determined by Committee (primarily based on income for the preceding 12 months plus capital for smoothing as needed) Gross Yes
Distributing(R) A8 Monthly Monthly Determined by Committee (primarily based on income for the preceding 12 months and any net interest rate differential, plus capital for smoothing as needed) Gross Yes
Distributing(Y) A9 Quarterly Quarterly Determined by Committee (primarily based on expected gross income subject to a prescribed minimum yield per year) Gross No
Distributing(T) A10 Monthly Monthly Determined by Committee (primarily based on the long-term expected total return of the Fund in the relevant currency) Gross Yes

* Share classes distributing gross of expenses are referred as class 1(G), 3(G), 4(G) and 5(G) shares

Below video illustrates several selected types of share classes using Class A shares as examples:

When it comes to choosing the right investment, investors need to first consider what their investment objectives are. Some investors look for capital growth, others for regular income payments, while there are those who may want access to both. At BlackRock, we offer a diverse range of funds and share classes to help you meet your investment goals and income needs.

If long-term capital growth is your primary focus, our base share class - the A2 accumulating - sees all income and gains retained and reinvested into the fund for potential future returns.

For those investors who prefer to receive a regular payout, the A6, A8 and A10 share classes provide these options1. The A6 is a distributing share class.that aims to provide investors with a stable monthly dividend per share by smoothing gross income generated by a fund over time. The A8 share class also provides stable monthly dividends but in addition to income, it includes the net interest rate differential generated by share class -currency hedging, aiming to provide an extra source of payout. However, investors should be aware that interest rate differential can fluctuate due to interest rate movements, and can even be negative. In order to stabilize dividends from month-to-month, both A6 and A8 share classes may make distributions from capital. While the price appreciation for A6 and A8 is expected to be less than A2, the monthly income distributions could help to meet an investor’s cash flow needs.

Our A10 distributing share class is a newer option for investors looking for regular payouts. The A10 is a different concept which aims to distribute monthly payouts primarily from the long-term expected gross total return of a fund2. As compared to A6 & A8, in addition to the potential income, it will take into consideration potential capital growth to determine payouts. A10 also has a mechanism in place to lower the risk of “over-distribution” in order to maintain a sustained payout over time. For example, if the fund’s actual total return3 is higher than expected, the payout may increase, and vice versa. We will review and adjust the payout level regularly as needed.

Simply put, A10 distributing class may be suitable for investors who are looking for a blend of both income and growth.  It aims to “convert” some of the fund’s potential returns into monthly payouts, whilst still maintaining the net asset value of the fund. But it does so at the share class level, and not by the fund investing in more income-generating assets, giving its fund managers greater flexibility in their investment strategy.

When it comes to choosing the right investment, investors need to first consider what their investment objectives are. Some investors look for capital growth, others for regular income payments, while there are those who may want access to both. At BlackRock, we offer a diverse range of funds and share classes to help you meet your investment goals and income needs.

If long-term capital growth is your primary focus, our base share class - the A2 accumulating - sees all income and gains retained and reinvested into the fund for potential future returns.

For those investors who prefer to receive a regular payout, the A6, A8 and A10 share classes provide these options1. The A6 is a distributing share class.that aims to provide investors with a stable monthly dividend per share by smoothing gross income generated by a fund over time. The A8 share class also provides stable monthly dividends but in addition to income, it includes the net interest rate differential generated by share class -currency hedging, aiming to provide an extra source of payout. However, investors should be aware that interest rate differential can fluctuate due to interest rate movements, and can even be negative. In order to stabilize dividends from month-to-month, both A6 and A8 share classes may make distributions from capital. While the price appreciation for A6 and A8 is expected to be less than A2, the monthly income distributions could help to meet an investor’s cash flow needs.

Our A10 distributing share class is a newer option for investors looking for regular payouts. The A10 is a different concept which aims to distribute monthly payouts primarily from the long-term expected gross total return of a fund2. As compared to A6 & A8, in addition to the potential income, it will take into consideration potential capital growth to determine payouts. A10 also has a mechanism in place to lower the risk of “over-distribution” in order to maintain a sustained payout over time. For example, if the fund’s actual total return3 is higher than expected, the payout may increase, and vice versa. We will review and adjust the payout level regularly as needed.

Simply put, A10 distributing class may be suitable for investors who are looking for a blend of both income and growth.  It aims to “convert” some of the fund’s potential returns into monthly payouts, whilst still maintaining the net asset value of the fund. But it does so at the share class level, and not by the fund investing in more income-generating assets, giving its fund managers greater flexibility in their investment strategy.

For further details on the Distributing (S), (R), (T) Shares and currency hedged share classes can be found here:

Distributing (S)/Class 6 Shares Explained

Distributing (R)/Class 8 Shares Explained

Distributing (T)/Class 10 Shares Explained

Hedged Share Classes Explained