Numerous macro factors overshadowed global financial markets last year . Given increased volatility and correlation among traditional assets , we are placing a greater emphasis on diversification and finding strategies that can provide positive absolute returns irrespective of what the market is doing . One option is
BlackRock European Absolute Alpha , an equity marketneutral fund that divides exposure between long and short positions with the aim of generating a positive absolute return over 12-month periods . It also places capital protection at the heart of its process . The portfolio is diversified across approximately 35 long and 75 short ideas , based on bottom-up stock selection . Managers Stefan Gries and Stephanie Bothwell go long reasonably valued companies run by management teams that have an impressive track record and focus on return on invested capital and delivering strong free cashflow . They look to short structurally challenged businesses with limited or no pricing power , high leverage , low returns , and / or the potential for earnings disappointment . The expected ex-ante risk is typically between 3 and 5 %.
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