Blackrock dominates absolute return and specialist sectors

A duo of BlackRock funds is dominating both the burgeoning IMA Absolute Return sector and the ailing IMA Specialist sector.

While both funds boast impressive three-year records, in the short-term they have been affected by the markets.

According to Cofunds, the absolute return sector now comprises 15pc of the platform's net - highlighting a flight to safety - while IMA Specialist dropped out of Cofunds' list of top 10 sectors in quarter three.

The platform's statistics show that the absolute return sector has grown since its launch in quarter two - with an increase of 7.16pc in net sales over the quarter - and the BlackRock Absolute Alpha fund sits both at the sector's helm in quarter three and at the top of the fund listings in terms of net sales year to date.

However, despite the increasing popularity of the absolute return sector it has not been immune to negative returns, with the one month sector average at -2.45pc (bid-to-bid according to Lipper, 8.10.08).

The BlackRock Absoute Alpha fund sits in line with this average (-2.74pc over the same period) but outperformed its peers on a three-year basis with returns of 30.03pc against the sector's 21.64pc (bid-to-bid according to Lipper, 8.10.08).

Similarly, in the specialist sector the BlackRock Gold and General fund hovers above the average (-11.77pc versus -12.28pc) but sits in second place in the listings on a three-year basis with returns of 32.17pc against the average of 0.2pc (bid-to-bid according to Lipper, 8.10.08).

The distressed specialist sector dropped out of Cofunds' top 10 list in quarter three, despite faring well in the first quarter (6pc net sales) and even better in the second quarter (8pc net sales). However, in the third quarter the sector suffered with almost 30pc of the sector funds in net redemption.

Russell Lancaster, director, fund manager relationships at Cofunds, commented: "The growth in the absolute return sector has been due to Blackrock's fund, although the fund's performance has declined in recent weeks compared to where it was, but relative to the market it is still positive."

Lancaster continued: "As for the specialist sector, the decline is directly attributed to the decline of commodity and resources funds."

To comment, contact Beth Brearley on 0207 484 9939 or email: elizabeth.brearley@incisivemedia.com

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