Fund Awards 2008
WINNER
Portfolio Adviser fund AwArds 2008 CAtegory winner
BlackRock UK Absolute Alpha Fund
Mark Lyttleton’s £1.4bn
BlackRock UK Absolute Alpha
Fund is one of only two
portfolios to win an award for
the second consecutive year
at the Portfolio Adviser Fund
Awards, the other being Robin
Geffen’s Neptune Global
Equity Fund.
Lyttleton admits that his
fund had its most difficult
quarter since it was launched
in April 2005, returning
-4.8% to the end of September
as volatility rose sharply.
Unsurprisingly, the fund’s
long equity positions made
the largest contribution to this
poor performance.
As Lyttleton explains:
“Previously, we have profited
Annual discrete performance
%
18
15
12
9
6
3
0
BlackRock UK Absolute Alpha
Source: Morningstar
Absolute return funds
Quartile performance: 1 Jul ’05 – 1 Jul ’08
1st q’tile
2nd q’tile
3rd q’tile
4th q’tile
Q3
’05
Q4
’05
Source: Morningstar
Q1
’06
Q2
’06
Q3
’06
Blackrock uK Absolute Alpha vs index
%
50
40
30
20
10
0
Jul ’05 Jan ’06
Source: Morningstar
substantially from our view
that the credit market dislo-
Q4
’06
fund facts
Absolute Return
Year ending Jun ’06
Year ending Jun ’07
Year ending Jun ’08
BlackRock UK Absolute Alpha
Jul
Fund name: BlackRock UK Absolute Alpha Manager: Mark Lyttleton
Launch date: 29 Apr ’05 Fund size: £1.36bn Initial charge: 5%
Annual charge: 1.75% Min initial investment: £250,000 M’star rating: N/A
Q1
’07
Q2
’07
Q3
’07
Q4
’07
Q1
’08
Q2
’08
December 2008 [www.portfolio-adviser.com] Portfolio ADViSer SUPPlemeNt
Jan ’07
Absolute Return
Jul
cation would be severe and
long lasting, notably through
negative views on those companies
that were most directly
impacted. More recently,
we have arguably been slow
to anticipate the secondary
impacts, including the consequences
of a reduction in
global growth expectations on
commodity prices.”
While global growth is
likely to slow, the plus points,
according to Lyttleton, include
the growth of emerging markets
relative to the developed
world being likely to
continue.
The fund has between 40
and 70 strategies in its drive to
provide the absolute returns
that seems elusive to so many
others with an absolute return
mandate. As at the end of
September, the position of the
fund is 53% gross, 3% net, 34%
in pairs, 11% in long positions,
and -7.8% short.
Jan ’08
Jul
“
While having a
tougher time in the
more recent markets,
BlackRock has
nonetheless shown the
way in absolute funds,
preserving capital in
the most difficult market
conditions seen since
the ’70s
”
Mark Dampier, PA Fund
Awards judge
BlackRock’s Nick Osborne
19
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