BlackRock has launched a new ESG-focused equity fund for UK pension schemes, designed to mitigate the impact of significant market declines while maintaining long-term growth potential.
The ACS World ESG Insights Protective Strategies fund, which launched on 20 October, is the asset manager’s first protected equity fund on its UK retirement platform.
The fund is aimed particularly at defined contribution (DC) pension schemes with members approaching retirement, offering an alternative to traditional de-risking strategies that reduce equity exposure.
It incorporates BlackRock’s World ESG Insights equity strategy, which seeks to reduce carbon emissions intensity and increase exposure to companies generating green revenues relative to its benchmark.
The strategy also applies BlackRock’s EMEA Baseline Screens and aims to improve the sustainability profile of its equity investments using the firm’s proprietary ESG insights.
According to BlackRock, the underlying equity strategy falls within the scope of its Climate and Decarbonisation Stewardship programme. The fund combines global equity exposure with an options-based overlay intended to cushion the impact of significant market downturns while retaining the potential to benefit from rising markets.
Adam Ryan, head of diversified strategies at BlackRock, said: “Traditionally, achieving downside protection often meant limiting participation in equity market gains. Our approach is different.
“By balancing protection with participation, we are providing clients with greater choice in how they allocate, with a solution designed to manage the impact of market declines without giving up the long-term growth potential of equity markets.”
Tim Hodgson, head of UK DC platforms and retirement solutions at BlackRock, added: “As members approach retirement, the challenge for pension schemes is not simply reducing investment risk, but ensuring members retain sufficient growth potential to support their retirement needs.”
The fund is managed by BlackRock’s Diversified Strategies team, with independent oversight from its Risk & Quantitative Analysis team.
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