BlackRock High Conviction Australian Equity Fund Class D

About this Fund

Fund Detail

PDS https://informedinvestor.com.au/view/pds/101166-2023-03-10-02:19.pdf
FUND MANAGER BlackRock Investment Management (Australia)
ASX Code
INVESTMENT STYLE The Fund will invest in industrial stocks generally excluding the top five stocks by market capitalisation.
INVESTMENT PROFILE The Fund aims to deliver returns that are 4-6% (before fees) p.a. above those of the Benchmark over rolling 3-year periods.
BENCHMARK S&P/ASX 300 Industrial Accumulation Index ex top 5 stocks by market capitalisation
FUND SIZE S&P/ASX 300 Industrial Accumulation Index ex top 5 stocks by market capitalisation
FEES 0.65% p.a.



Benefits of investing in the BlackRock High Conviction Australian Equity Fund Class D

  • Access to extensive investment expertise. The existing investment team of four senior investors has more than 70 years of investment experience (and stock picking) between them.
  • Fundamental investment process. Access to a fundamental investment process with a strict adherence to the five quality filters (please refer to section 5 of this PDS, titled "How we invest your money, for further information) and a skilled and pragmatic approach to valuation. The flexible investment process focuses on well-managed industrial companies that can deliver superior returns.
  • Backed by BlackRock. The investment team has access to the broader BlackRock Group including its market-leading risk management platform. This support enables the investment team to focus on identifying the best investment opportunities.

Risk level


Investor suitability

The Fund may be suitable for investors who seek an actively managed, concentrated strategy that contains high conviction ideas targeting long-term capital growth and income through investing in Australian industrial shares.




Key Features

About the Fund

With the Australian economic landscape rapidly changing, successful investing strategies need to be responsive to a growing number of challenges, both local and global. By looking beyond traditional industrial stocks and resource companies to capture performance potential, the BlackRock Concentrated Industrial Share Fund ("fund) meets these challenges with a more diversified, high conviction approach to Australian Equities investing.

Investment approach

The Fund applies a fundamental approach that is focused on bottom up analysis, where detailed research is conducted prior to any investment decision. There is a strict focus on quality first and only those companies that meet the following quality filters will be considered for inclusion in the Fund:

  1. Quality management. We will not invest in a company without a rigorous assessment of the board and management team. This will generally involve direct contact with key personnel.
  2. Moderate debt levels. A company's interest coverage ratio measures how many times over that company could pay its current interest payment with its available earnings. We will not invest in any company with an interest coverage ratio of less than four times.
  3. Profits. We will only invest in businesses that can demonstrate a history of recurring profits.
  4. Superior businesses. We will only invest in quality businesses that can be clearly understood and explained in a simple manner.
  5. Environmental, social and governance (ESG). BlackRock has a dedicated Corporate Governance and Responsible Investment team. With their help, we will assess relevant information relating to the environmental, social and governance risks that may impact company valuations for each investment opportunity and incorporate this into the investment process.

We believe that the focus on quality first adds significant outperformance, particularly in times of market dislocation, where successful investing is as much about avoiding the losses as picking the winners.

Once we are satisfied that a company has successfully passed the above five filters, we use a number of valuation techniques to identify value. Our flexible "blend investment style focuses on stocks with attractive growth and value characteristics. A concentrated portfolio of 20 to 40 stocks is then constructed from an investible universe of approximately 200, which will have a balance of risk across all sectors.


How we invest your money

The Fund will invest in industrial stocks generally excluding the top five stocks by market capitalisation. The Fund will also generally not invest in resource stocks. We believe this approach leads to a more diversified portfolio that focuses on uncovering opportunities outside of these stocks.

The Fund generally invests in those Australian stocks that form the Benchmark. The Fund's portfolio may also include stocks outside of the Benchmark, but still listed on ASX, and pre-IPO investments, as long as there is a firm plan to list the stock on the ASX within a year. The Fund may also hold a small allocation of cash (or cash equivalents that may include units in other BlackRock funds) for cash flow management purposes.

Asset allocation ranges

(Asset sector: Min-Max / Benchmark)

  • Australian stocks: 90-100% / 100%
  • Cash (or cash equivalents): 0-10% / 10%