fund

Rated

This is one of our rated funds. They’re the ones our experts believe will do well for investors over the longer term. Top of the class!

BlackRock UK Absolute Alpha D

A long short UK equity strategy targeting 4-5% p.a. after fees on a rolling 3yr basis.

  • 151.30p
    Price (Inc)

    These are the shares in the fund that pay out an income to clients. The income is made up of the total dividends – the money a company can pay out to its investors – from the companies in the fund.

  • -
    Price (Acc)

    These are the shares in the fund that don’t pay out an income to clients. Any dividends – the money a company can pay out to its investors – are reinvested into companies in the fund. Despite no income, the shares should be worth more over time. Good incentive, eh?

  • 0.00%

    Initial charge

    Some funds charge you when you first invest, which is aptly known as the initial charge. They’re usually between 3-5% but at Bestinvest, we usually don’t charge you a penny!

  • 0.75%
    Annual management charge

    This is how much the fund management company charges to run the fund. It’s like paying a babysitter, dog sitter or house sitter (that makes well-informed, heavily researched changes to improve your baby/dog/house when needed).

  • 0.92%
    Ongoing charges

    This stands for Ongoing Charges Figure. It’s the cost of running a fund and includes admin fees, manager fees, administration costs, etc.

  • 0.10%
    Yield

    How much the fund is currently paying out in income to investors. It’s NOT to be confused with the overall growth of a fund – a very different thing indeed. It’s also NOT a guarantee of future pay-outs, just a snapshot. This is more what it’s not than what it is…

Prices as at 22 May 2020, fund data last updated 04 September 2019

The fund targets positive returns in all market conditions through investment primarily in FTSE 100 and FTSE 250 UK equities. To achieve the objective manager Nigel Ridge takes traditional long positions in stocks he expect to rise in value, as well as short (negative) positions in stocks he expects to underperform. The fund’s overall market exposure is kept low, typically between -10% to +30%, whilst gross exposure will not be more than 150%. Typical fund volatility is 5-7%, with the aim of generating returns of 4-5% p.a. over a 2-3 year period.

Fund summary

Sector Targeted Absolute Return
Structure UNIT TRUST
Launched July, 2009
Size £240m
Yield 0.10%
Charging basis Income
Dividends paid Acc units only

Charges

Standard initial charge 0.00%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread 0.07%
Annual management charge 0.75%
Ongoing charges figure 0.92%

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Investment process

The fund’s investment universe is primarily FTSE 350 stocks, though some small-caps may also feature. Since the current manager took over in 2013, the fund's typical gross exposure has been raised to enable him to strike towards the performance target; small cap exposure has also been de-emphasised; potential net portfolio exposures are unchanged. Positions are primarily held via Contracts for Difference (CFDs) rather than directly in the equities. As well as naked long and naked short positions, the portfolio will also include pair trades. Index futures may be used to regulate overall market exposure. The manager applies a pragmatic approach to stock selection, combining macroeconomics with fundamental stockpicking. He identifies changes to growth rate, risk profile and investor perspective and uses proprietary spreadsheets to aid analysis. The aim is to identify a catalyst that might unlock value (or destroy value in the case of a short holding). The manager pays careful attention to managing style / factor risks across the portfolio.

This was one of the first targeted absolute return funds made available to UK retail investors when it launched in 2005. After a strong start returns fell away, but since Nigel Ridge too control in 2013 he has given the fund a new lease of life. Ridge had already achieved strong returns on an offshore hedge fund with a similar mandate, and has modified the UK Absolute Alpha fund to reflect the market environment and his analytical strengths. Ridge benefits from the support of a strong UK equity team at BlackRock including two dedicated absolute return analysts.

Manager research

Average monthly relative returns

  • 15/16 0.00%
  • 16/17 0.00%
  • 17/18 0.00%
  • 18/19 0.00%
  • 19/20 0.00%

Bestinvest MRI

  • 3 years 0.00%
  • 5 years 0.00%
  • Career 0.03%
  • 3 years 0.00%
  • 5 years 0.00%
  • Career 50.00%

Performance figures are based on the average of monthly percentage returns relative to the benchmark index.

Nigel Ridge

Ridge has been lead portfolio manager for BlackRock's UK Equity Hedge Fund since launch in 2005 and is responsible for covering research in the financials sector. He joined BlackRock in 2004 and has 25 years’ experience of managing UK equities on both a core and a high performance basis. Prior to joining BlackRock, he worked at Legal & General, Morgan Grenfell (later purchased by Deutsche Asset Management) and Schroders. Ridge earned a BSc degree with first class Honours in Electrical and Electronic Engineering from Loughborough University in 1988.

Track record

Nigel Ridge has 6.2 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been +0.03%. During the worst period of relative performance (from September 2000 - June 2002) there was a decline of 9% relative to the index. The worst absolute loss has been 37%. Statistically, we estimate the probability that this fund manager is adding value, rather than being lucky, is 50%.

Periods of worst performance

Absolute -37.00% (August 2000 - July 2002)
Relative -9.00% (September 2000 - June 2002)

About the MRI

Our unique indicator: the Bestinvest Manager Record Index (MRI) measures the likelihood that the fund manager is adding value through their decisions. It is based on their performance record over the course of their career, adjusted for the amount of risk taken. MRI is an important contributor to our fund rating system but it is also vital to take account of qualitative factors. It is also very important to select funds to form a cohesive portfolio with an appropriate overall risk level.

Allocation

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Top 10 holdings

Data accurate as at 31 January 2020

5.4791% Tesco
5.0498% Relx Plc
4.1339% Rentokil Initial Plc
3.5119% British American Tobacco
3.2655% Royal Dutch Shell
3.1897% Rio Tinto
2.8711% Serco Group Plc
2.8685% Crh
2.6848% Standard Chartered
2.34% Ssp Group Plc
Source: Trustnet

Sector breakdown

Financials 12.00%
Oil & Gas 5.00%
Consumer Services 3.00%
Consumer Goods 2.00%

Portfolio

70-90 positions - typically 30 long, 30 short and 20 pairs.

Constraints

Max 10% in any one holding.

Key Investor Information

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