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BlackRock unveils merger plans to streamline global equity funds

BlackRock unveils merger plans to streamline global equity funds

BlackRock has outlined plans to merge two of its global equity funds to simplify the overall product range, Citywire Global has learned.

The asset management giant wrote to shareholders on June 24 over the proposed merger within the Luxembourg-domiciled funds.

This will see the $243 million BGF Global Equity fund merged into the $125 million BGF Global Opportunities fund. Both of which are co-run by Citywire + rated Ian Jamieson and Tom Callan.

In the letter to investors, BlackRock said: ‘Following a review of the company’s range of sub-funds, the directors have decided to rationalise and simplify the fund range by providing a single global equity offering.’

‘The merger will enable investors to benefit from economies of scale since the portfolio management team which currently manages both sub-funds will be able to focus on managing a single combined sub-fund rather than two separate sub-funds with very similar risk and return targets and investment objectives and policies.’

BlackRock said both of the funds have at least 70% of net assets invested in global equities, while there is approximately 90% commonality in holdings between the two funds.

In addition, it said the decision to merge the larger Global Equity fund into the Global Opportunities fund was because the name ‘Global Opportunities’ would better reflect the investment strategy used by the portfolio management team.

In addition, the BGF Global Opportunities fund was launched in February 1996, while the BGF Global Equity fund was unveiled in 2005.

The Global Equity fund will be closed to subscriptions, redemptions and switching requests on September 18 2015, with the assets being merged at the close of business on this cut-off date. All changes will be completed by September 25 2015.

The BGF Global Opportunities fund returned 44.3% in US dollar terms over the three-year period to the end of June 2015. This compares to a rise of 46.6% by its Citywire-assigned benchmark, the MSCI AC World TR USD, over the same period.

Meanwhile, the BGF Global Equity fund returned 34.2% over the same 36 month period against a rise of 51.7% by the MSCI World TR GBP.

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