Fund Rationale: BlackRock BGF World Technology Fund

BlackRock BGF World Technology Fund (the "Fund")
SGD Hedged Class A2 Accumulation Shares (ISIN: LU1852331112)
Fund Manager Page
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Endowus has selected the Fund as it offers:

  • Balance between Core and Opportunistic companies across various market caps, geographies, and sectors, including private companies, to allocate into established leaders and emergent companies positioned for long-term growth;
  • Unconventional approach to cover a vast universe of tech companies, defined by proprietary taxonomy;
  • Highly experienced PM and team that implement a disciplined top-down, bottom-up process to cover a vast universe of opportunities in the most effective and long-term oriented manner; and
  • Retail share class with 100% trailer fee rebated back to Endowus investors to lower cost of access.

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Key Information

Fund Objective: The Fund seeks to maximise total return by investing globally and primarily in the equity securities of companies whose predominant economic activity is in the technology sector.

Suitability: Investors who seek to maximise total return, seek to invest in stocks of companies whose predominant economic activity is in the technology sector, and are informed investors willing to adopt capital and income risk.

Cost:
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  1. Total Fund-level Fees include fund management fee of 1.50%.
  2. This is a retail share class with 100% trailer fee rebated back to Endowus investors to lower the cost of access.
  3. Endowus do not charge a preliminary sales charge or any other additional fees, other than the all-in Endowus Access Fee.

Fund Characteristics

Fund Inception: 3 March 1995
Share Class Inception: 25 July 2018
Benchmark: MSCI ACWI Information Technology

Fund AUM: SGD 17.9bn
Source: MorningStar as of 24 June 2021. Please refer to the FMC page for the most updated AUM.

Regional Allocation:
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Sector Allocation:
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Source: MorningStar as of 31 May 2021. Allocation data indicate actual exposure as a percentage of the Fund's total Net Asset Value. Please refer to the Fund Manager Page for the most updated information on Fund Holdings and Breakdown.

Selection Criteria

Endowus has selected the BlackRock BGF World Technology Fund for its unconventional approaches in delivering superior long-term returns through a balanced portfolio of both “Core” and “Opportunistic” companies across various market caps, geographies, and sectors. The strategy managed by a highly experienced and dedicated technology team.

We like the Fund’s diversified portfolio that holds 100 to 150 different companies across various market capitalisations (large to small, but with a bias towards mid caps) and geographies that makes it stand out from other industry-defined allocations such as its benchmark. With a fundamental-driven focus to identify companies with attractive future growth potentials, the Fund maintains a balance of “Core” companies (40-50% of the portfolio, more established companies with large market cap) and “Opportunistic” companies (50-60% of the portfolio, emergent companies with innovative technology), including a private company allocation of up to 2% -- the resulting portfolio is underweight on common market favourites, and attempts to generate alpha from smaller companies with greater future growth trajectories.

The Fund’s systematic investment process is another factor that sets the strategy apart from its peers -- unlike most other funds in the technology space that depend solely on bottom-up research, the Fund approaches the universe via a top-down analysis to identify macro themes that are likely to affect the value chains and lifestyles of users worldwide, before mapping the trends into strategic sub sectors that will benefit from such developments in the long term, using a proprietary universe taxonomy that is agnostic of traditional sector guidelines . All in all, we think the Fund offers a unique, value-added approach to own high-potential global technology companies to maximise returns in the long run.

In another unconventional approach, the BlackRock Technology team adopts a collaborative workflow of having the PMs and Analysts covering the entire investments together, rather than having siloed analysts who specialise in certain industries and geographies. This allows for greater scalability in identifying opportunities from a universe of more than 3000 public and private technology companies worldwide. The team, based in San Francisco, also benefits from its proximity to Silicon Valley to gain access to emerging and established technology companies, as well as the latest developments in the tech scene. The strategy is run by Lead PM Tony Kim and Co-PM Reid Menge; Tony Kim, in particular, has overseen the strategy since 2013 and has spent over 20 years covering the technology sector, creating the strategy’s various unique industry-agnostic approaches.

The Fund, in line with its investment objective, has a good track record of delivering top-tier returns over the long term compared to its peers and benchmark. Investors should note that, over the short term, the Fund may experience some volatility due to its exposure to smaller cap holdings across the world, although over the longer economic cycle (3 to 5 years), the Fund has demonstrated unparalleled returns with relatively controlled drawdowns during market turndowns.

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Updated by Endowus: June 2021

** Disclaimer: Past performance should not be taken as an indication or guarantee of future performance and no representation or warranty, express or implied, is made regarding future performance. Any opinions expressed reflect a judgment at the original date of publication by us and are subject to change without notice.
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