BGF Global Allocation E2 (EUR) |
Morningstar's Take
|16/05/2024by Jason Kephart
| On April 16, BlackRock announced portfolio manager David Clayton will retire on June 30, 2024. Clayton joined the global allocation team in 2010 and has been a named manager since 2017. His primary focus was leading the fundamental equity sleeve of the portfolio. Sarah Thompson, a member of the global allocation team since 2018, will take over his duties on the fund. Her background is primarily in credit research; before joining the global allocation team she spent five years as BlackRock’s global director of credit research. As part of the transition, Thompson will lead a newly formed strategic investment group with three fundamental sector equity leaders. We don’t expect the changing of the guard to alter the fundamental equity selection process. The continued presence of lead portfolio manager Rick Rieder and his senior investment team of Russ Koesterich, Kate Moore, Randy Berkowitz, and Thompson continue to support a High rating for People. |
| A senior leadership transition doesn’t dull our view of BlackRock Global Allocation. It remains a top choice for investors looking for a globally diversified balanced strategy. In June 2024, David Clayton, lead of this strategy’s fundamental equity sleeve, will retire. Clayton has been on the team for more than a decade and was named as a portfolio manager in 2017. Although his experience can’t be replaced, we expect a seamless transition to Sarah Thompson, who will assume his role. Thompson joined the fundamental equity team in 2018 and previously served as BlackRock’s global director of credit research for five years; she worked closely in that role with Rick Rieder, this strategy’s lead architect. She was recruited to the team before Rieder joined because of her expertise in credit research, where analyzing a company’s full capital structure from equity to debt was paramount in making good calls. The fundamental equity sleeve, which makes up about 40% of assets, has undergone the most change since Rieder took over leadership of the strategy in 2019. The portfolio has become more concentrated and has shrunk to 80-120 names from more than 400. The stock selection focus has also shifted more toward companies with strong cash flows, like mega-caps Microsoft and Amazon.com. Rieder has updated the strategy's approach to top-down positioning since he joined, too. While previous management's focus on relative valuations steered the portfolio toward Japan and Europe, Rieder's macro research favors the US because of the country's higher growth expectations. There has also been an increased emphasis on incorporating more nontraditional high-frequency data, like web traffic, to determine where economic growth is being over- or underanticipated, which is used to help inform portfolio positioning. The strategy's risk management capabilities have also sharpened. It leverages BlackRock's vast resources to ensure there are no unintended bets and exposures. Given the strategy’s broad remit, having the tools to effectively monitor the portfolio’s exposures is a key attribute. Altogether, these changes make for a more robust process than many peers. |
On top of the world.To find out how Morningstar rates a fund click here.
| Morningstar Pillars | |
| People | Above Average |
| Parent | Above Average |
| Process | High |
Morningstar Medalist RatingMorningstar assigns the Medalist Rating to funds that are qualitatively and quantitatively assessed through manager research and algorithmic processes. The assessment turns on three key “pillars” – People, Process, and Parent – that yield an estimate of how well a fund will perform before fees but after adjusting for risk.
|
| Morningstar reserve its rights to charge for access to these Ratings and/or Rating report. |
|
| Permissions/Reprints E-mail Morningstar |
