It is made up of the BofAML US Treasuries 5+Y TR USD with a 24% weighting; the FTSE World Ex US TR USD (24%); the Citi WGBI Non USD USD (16%); and the S&P 500 TR (36%).
The BlackRock fund had about 63.5% allocation to equities on 30 April. About 20% was held in fixed income while cash and cash equivalent securities amounted to 15.8% of the fund’s assets.
The Schroders vehicle does not have a benchmark index. On 30 April, the fund had nearly 40% of assets held in equities. The next highest exposure was US high yield (20.1%).
“The Schroders fund has a stronger focus on yield generation, and attempts to maintain 5% annual yield and an annual target return of 7% over the long-term.”
In regards to the fixed income portion of the portfolio, the BlackRock fund tends to have a stronger focus on higher quality credit whereas the Schroders fund tends to hold more high yield securities in order to meet the 5% annual yield, Ng pointed out.
In terms of currency exposure, the BlackRock fund is overweight the US dollar whereas the Schroders fund has a combined exposure of 91.2% to US dollar and Hong Kong dollar.
The BlackRock fund is underweight US equities and US fixed income against its composite benchmark, and overweight Japanese equities.
The Schroders fund has lower exposure toward US and Japanese equities than the BlackRock fund and stronger focus is placed on emerging equities, Ng said.
The BlackRock fund’s top sectors include financial, healthcare and information technology.
Another difference is that the BlackRock fund factsheet did not show exposure to alternatives, but Schroders reported about 5% of assets invested into alternative assets and properties.
The dividend yield of the BlackRock fund was 2.2% on 31 March, lower than the 4.7% of the Schroders fund. This may be due to the differing regional or asset allocation focus, Ng said.
On the other hand, the price-to-earnings multiple of both funds are fairly similar.
