BLSAX
BlackRock Advantage Emerging Market-InvA
Introduction to BlackRock Advantage Emerging Market-InvA
The BlackRock Advantage Emerging Market-InvA (BLSAX) is a mutual fund designed to provide investors with total return over time by investing primarily in global equity securities and related derivatives tied to emerging markets. With a focus on both long and short positions, the fund aims to capitalize on the dynamic growth potential of emerging economies. As part of the BlackRock family, BLSAX benefits from the expertise and resources of one of the world’s leading asset management firms. This fund is particularly appealing to investors seeking exposure to high-growth markets with the potential for significant returns, albeit with a higher risk profile.
At A Glance
Executive Summary
BLSAX offers diversified exposure to emerging markets with a focus on total return. It stands out with a 1-year return of 14.50% and a yield of 1.83%.
Exposure to high-growth emerging markets; Strong 1-year return of 14.50%; Managed by BlackRock, a trusted name in asset management.
Higher expense ratio of 1.16%; Negative alpha indicating underperformance; High volatility with a beta of 1.07.
Performance Analysis: Navigating Emerging Market Volatility
BLSAX has demonstrated a mixed performance over various time frames, with a notable 1-year return of 14.50%, which is competitive within its category. However, its longer-term performance metrics, such as a 3-year return of -3.90% and a 5-year return of 1.72%, suggest challenges in maintaining consistent growth. The fund’s performance is closely tied to the volatility inherent in emerging markets, as evidenced by its beta of 1.07, indicating higher sensitivity to market movements compared to its benchmark, the MSCI ACWI xUS DivAdj Index. Despite these challenges, the fund’s recent performance highlights its potential to capitalize on short-term market opportunities.
Portfolio Composition: A Focus on Technology and Financials
The portfolio of BLSAX is heavily weighted towards the technology and financial sectors, which together constitute over 50% of its holdings. This strategic allocation reflects the fund’s emphasis on sectors that are pivotal to the growth of emerging markets. Notable holdings include Taiwan Semiconductor Manufacturing Co Ltd and Tencent Holdings Ltd, which are leaders in the technology sector. The fund’s allocation to financials, including companies like Ping An Insurance, underscores its focus on sectors that are integral to economic development in emerging markets. This sectoral focus positions BLSAX to benefit from technological advancements and financial sector growth in these regions.
Risk Metrics: Understanding the Fund’s Volatility
Investors in BLSAX should be aware of the fund’s risk profile, which is characterized by a standard deviation of 4.15% and a beta of 1.07, indicating higher volatility compared to its benchmark. The fund’s negative alpha of -2.77% suggests it has underperformed relative to its expected returns, given its risk level. Additionally, the Sharpe Ratio of -0.19 and Treynor Ratio of -2.59 highlight challenges in achieving risk-adjusted returns. The fund’s downside risk, measured by a downside risk (UI) of 3.17, further emphasizes the potential for significant fluctuations in value, which is a common characteristic of investments in emerging markets.
Comparative Analysis: How BLSAX Stacks Up Against Peers
When compared to similar funds, BLSAX offers a competitive 1-year return of 14.50%, which is in line with peers like Northern Active M Emerging Market Equity (NMMEX) and Alger Emerging Markets-A (AAEMX). However, its expense ratio of 1.16% is higher than some competitors, such as abrdn Emerging Markets ex-China-A (GLLAX) and Driehaus Emerging Markets Growth-Inv (DREGX), which may be a consideration for cost-conscious investors. Despite this, BLSAX’s yield of 1.83% is attractive compared to some peers, providing an additional income stream for investors. This comparative analysis highlights the fund’s strengths and areas for improvement relative to its peers.
Sector and Market Cap Allocation: Strategic Positioning for Growth
BLSAX’s sector allocation is strategically positioned to capture growth in emerging markets, with significant investments in technology (26.86%) and financials (23.34%). This focus aligns with the broader economic trends in emerging markets, where technology and financial services are key drivers of growth. The fund’s market cap allocation is predominantly in extra-large (55.74%) and large-cap (24.15%) companies, which are typically more stable and established, providing a balance between growth potential and risk. This strategic positioning allows BLSAX to leverage the growth of large, influential companies while maintaining exposure to the broader market dynamics of emerging economies.
Max Drawdown and Recovery: Resilience in Market Downturns
BLSAX experienced a maximum drawdown of -9.8% during a recent market downturn, with a quick recovery length of just one month. This resilience is indicative of the fund’s ability to rebound from market setbacks, a crucial factor for investors concerned about volatility in emerging markets. The fund’s ability to recover swiftly from drawdowns is a testament to its dynamic investment strategy, which includes both long and short positions. This approach allows BLSAX to adapt to changing market conditions and potentially mitigate losses during periods of market stress, providing a level of reassurance to investors seeking exposure to emerging markets.
Conclusion: Is BLSAX the Right Fit for Your Portfolio?
In conclusion, BlackRock Advantage Emerging Market-InvA (BLSAX) offers investors a unique opportunity to gain exposure to the growth potential of emerging markets. With a strong 1-year return and a focus on high-growth sectors like technology and financials, the fund is well-positioned for investors seeking capital appreciation. However, the higher expense ratio and volatility associated with emerging markets may not suit all investors. BLSAX is best suited for those with a higher risk tolerance and a long-term investment horizon, who are looking to diversify their portfolio with exposure to dynamic and rapidly growing economies. As always, potential investors should consider their individual financial goals and risk appetite before investing.
Similar Securities
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FEMDX offers a 19.82% 1-year return with a focus on emerging market debt, providing high growth and income potential with a 1.02% expense ratio.
EBNAX: American Funds Emerging Markets Bond-A | High Yield Emerging Market Debt
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PAIJX: Em Mkts Discv Stk Adv | Emerging Markets Growth Fund
PAIJX focuses on undervalued large-cap stocks in emerging markets, offering a 2.51% yield. It stands out with a diversified portfolio and growth potential.
Futher Reading
https://www.morningstar.com/funds/xnas/BLSAX/quote
https://finance.yahoo.com/quote/BLSAX/”>Yahoo: BlackRock Advantage Emerging Market-InvA
https://ftcloud.fasttrack.net/web/chart/BLSAX
https://www.wsj.com/market-data/quotes/mutualfund/BLSAX
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