BlackRock Asset Allocation Alpha Fund is designed for investors seeking the potential for high absolute returns and aims to provide investment returns that are uncorrelated with other asset classes.The Fund employs a diverse range of global Tactical Asset Allocation (TAA) strategies and targets a return of 12 percentage points above the UBS Australia Bank Bill Index over rolling 3 year periods, gross of fees.

Key features and benefits

What is the Fund’s strategy?
The BlackRock AAA Fund uses tactical asset allocations to achieve its investment objective. The investment strategies adopted are thematic, concentrating on exploiting trends, likely developments and mis-pricing in global asset markets. The strategies adopted encompass equity, cash, fixed interest, property, commodity and currency markets.

Trades executed to implement these strategies may be based on an expectation of the direction of a particular market or focus on relative values between and within regions, asset classes, sectors, currencies and instruments or some combination thereof.

What does the fund invest in?
Typically the AAA Fund uses derivatives with holdings in cash and short-term fixed interest securities to achieve exposures to desired positions in markets, although any derivative or physical instrument or asset from any asset class and/or currency subject to consistency with its risk budget.

The Fund makes extensive use of over the counter swaps, options, currency forwards and futures. The choice is dictated by the need to execute investment strategies in the most targeted, cost efficient and risk controlled manner.

Who should consider investing in the fund?
The Fund should be considered by investors seeking the potential for high absolute returns, or who are seeking exposure to asset allocation strategies. Investors should have a longer-term investment horizon and be prepared to accept the risk of volatility in global markets.