BGF Fixed Income Global Opps A4 USD |
by Eric Jacobson
BlackRock Strategic Income Opportunities pairs broad and deep resources with a well-honed, risk-averse process to earn High People and Process ratings. Lead manager and CIO Rick Rieder has worked with comanager Russ Brownback for more than 30 years, including behind the scenes on this strategy until the firm added Brownback to the roster in October 2022; 17-year BlackRock veteran David Rogal joined Rieder here in 2017. They get additional help from Chi Chen, also named as a comanager on the firm's Total Return offering. BlackRock's extensive capabilities synthesize meticulous macroeconomic and bottom-up research that this team uses to identify big trends affecting markets and to position the portfolio accordingly. This can be more art than science, but Rieder is a voracious consumer of data and labors to digest large amounts of information into actionable themes while relying mostly on the firm's sector teams for individual security selection. While the strategy's duration can range between negative 2.0 years and positive 7.0 years, the team has kept it within a tighter range of 0.0-4.0 years. The strategy has no portfolio benchmark and is very diversified, emphasizing the taking of many small bets rather than fewer large ones. The team uses derivatives to hedge risks as well as to take outright positions. That flexibility has helped in several periods of market stress, including 2022's historically awful year for bonds. The team kept risk in check and adjusted nimbly to the year’s zig-zagging market, with the U.S.-domiciled vehicle outpacing its average distinct peer in the nontraditional bond Morningstar Category by 60 basis points, and broad-market indexes by more than 600 basis points. The strategy then produced a 7.3% gain in 2023 that, while a little short of more aggressive peers, was well ahead of most broad market indexes by at least 150 basis points. From September 2010 through December 2023, the 3.2% per-year gain of the U.S. vehicle's institutional shares outperformed more than half of its distinct peers in the nontraditional bond category, while its volatility-adjusted performance (as measured by Sharpe ratio) over the same period topped more than 70% of those offerings. That kind of result is reasonable to expect for a strategy like this, which almost always takes less overall risk than nontraditional strategies that stretch for returns with higher-octane credit exposures. |
Morningstar Pillars | |
People | High |
Parent | Above Average |
Process | High |
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