by Bill Wysor | February 7, 2014 2:26 pm
BlackRock (BLK) boasts one heck of a stable of mutual funds, and … well, even if you’re not necessarily a fan of BlackRock funds in particular, you have to recognize that they do offer some compelling products.
You see, as a self-directed investor and editor of The Relevant Investor newsletter, I follow and track funds and fund families that offer low-cost mutual funds and ETFs available to those that make their own decisions on asset allocations and specific investments.
But the fact of the matter is that not everyone sees the world as I do — and that means that many seek out financial advisers for all or part of their investing needs. In this world, BlackRock funds stand out as a clear success story.
BlackRock was founded in 1988 and has grown into a large, diverse global firm that can boast assets under management in excess of $4.3 trillion.The BlackRock funds family includes 200 open-ended mutual funds. Meanwhile, the firm employs more than 10,000 people and has achieved a huge following for its iShares ETF products.
All mutual funds are adviser-sold, but there are multiple share classes and the amount of commission charged will decline based on the size of the purchase. In this comparison, Class A shares have been analyzed — but consult your adviser and negotiate your best price on the funds that fit your individual financial circumstance.
Click to Enlarge BlackRock Global Allocation (MDLOX) is a product built for diversification, investing in stocks and debt instruments on a global scale. This $57.2 billion fund is guided by Dennis Stattman, who has been on this fund since inception.
Currently, MDLOX is about 63% invested in equities with 21% committed to fixed-income instruments and a 16% cash stake.
In the stock allocation, U.S. firms account for 33% of the fund’s holdings and Japanese companies account for 8%. Within the equity slice of the fund, Google (GOOG), General Electric (GE), Procter & Gamble (PG), Pfizer (PFE) and Visa (V) represent the top five holdings.
In this one product. an investor gets a diversified mix that has fared well over time, with the fund up an annualized 7.6% during the past decade. This performance lands the fund in the top 25% of its Morningstar world allocation peer group.
Turnover recently was 50% on this popular fund, indicating that half of this portfolio was replaced in the past year. Meanwhile, fund expenses here run 1.07%, or $107 annually for every $10,000 invested.
Click to Enlarge For investors seeking growth as well as income, BlackRock Equity Dividend Fund (MDDVX) is a solid choice that has a proven process that has worked well over time. This $28.7 billion fund had an off year in 2013, up just 24.3% in a market that rewarded growth and risk over dividends. But during the past decade, this fund has returned 8.5% on an annual basis, and ranks in the top 4% of its Morningstar peer group.
Patience is the watchword with this offering — turnover averages just 15% over the past year.
Manger Bob Shearer leads a team that looks for firms with solid balance sheets and the potential to increase dividends over time. This leads the fund into a strong commitment to financials, with 22% of the portfolio in names like JPMorgan Chase (JPM) and Wells Fargo (WFC). Industrials account for 15% of the fund, with General Electric a top holding in this sector. Energy firms are 14% of this portfolio, and Chevron (CVX) is a leading name in this space.
Fund expenses run 1%, or $100 for every $10,000 invested.
Click to Enlarge For investors looking for a growth option, Blackrock Mid-Cap Equity (BMGAX) is a solid choice. This fund has a new manager at the helm with Lawrence Kemp taking over in 2013.
This management change is most likely part of the 160% turnover that the fund reported over the past year, as the fund’s holdings were repositioned.
So far, results are encouraging — the fund is up 34% over the past year, which places it in the top 3% of its Morningstar peer group. Over the past five years, the fund has returned an annualized 21% as growth investing has been handsomely rewarded. Annual average returns of 7.8% over the past 10 years are impressive, too.
BMGAX has a smallish asset base of $361 million, so the manager here can be nimble when it comes to finding and acting on compelling growth stories. Many medium-sizes firms fall under the radar of most Wall Street analysts, and this can be advantageous for the right stock picker. Recent top holdings include Liberty Ventures (LVNTA), Jarden Corp. (JAH), Yelp (YELP) and Wynn Resorts (WYNN).
BMGAX charges 1.39% in annual expenses.
Click to Enlarge For investors seeking a fixed income product that can adjust to the potential of rising interest rates, BlackRock Strategic Income Opportunities (BASIX) might be the right option.
This unconstrained bond fund has a wide mandate and travels throughout the world to find opportunity. Most of the fund is made up of domestic fixed-income instruments, but there are holdings scattered across the globe in this portfolio.
With the freedom to invest in anything from emerging market bonds to non-dollar-denominated issues, this fund maximizes flexibility.
BASIX has 32% of assets in bonds rated AAA, with 21% of the portfolio in bonds rated BB or below. So there is diversification in bond quality as well as the geographic makeup of the fund.
This eclectic fund has attracted a $12.4 billion asset base. Over the past year, BASIX is up 2.1% and has returned 9.1% annualized over the past five years. Recently the portfolio had a weighted average maturity of four years and reported a trailing 12-month (TTM) yield of 2.6% with a 30-day SEC yield of 2.1%.
BASIX charges 0.9% in expenses.
As of this writing, Bill Wysor did not hold a position in any of the aforementioned securities.
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