2019: A Strong Year for Income Assets, Less So for Some Income Funds
A volatile end to 2018 resulted in an overly conservative positioning going into 2019.
Most asset classes, especially income-generating ones, enjoyed a strong 2019 after a volatile 2018. Popular dividend-payers, such as Microsoft (MSFT) and Procter & Gamble (PG), and large banks such as JPMorgan Chase (JPM) significantly outperformed. And on the bond side, the higher-yielding bond categories, such as corporate debt, high-yield, and emerging-markets debt, returned an average of 13%.
With a yield of almost 5%, BlackRock Multi-Asset Income (BIICX), with a Morningstar Analyst Rating of Silver, is one of the most income-oriented strategies among its allocation--30% to 50% equity Morningstar Category peers. This strategy leverages BlackRock’s strong fixed-income and risk-management capabilities to take a more tactical approach to asset allocation across a broad universe that includes global high-yield, bank loans, covered-call strategies, and preferred stocks. In 2018, it performed well, beating 75% of its category peers with a decline of 3.6%. In 2019, the fund's bond sleeve was well positioned--by year-end it was overweight high yield, bank loans, and emerging-markets debt, with allocations at 19%, 14%, and 6%, respectively. But the fund’s 2019 return of 13.9% lagged 72% of category peers, as the fund’s strong performing fixed-income sleeve could not overcome its below-average allocation in equities for most of the year and its underweight in the highest-returning areas of the U.S. market, such as technology and communication services.
Patricia Oey has a position in the following securities mentioned above: MSFT. Find out about Morningstar’s editorial policies.
Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.
We’d like to share more about how we work and what drives our day-to-day business.
We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.
How we use your information depends on the product and service that you use and your relationship with us. We may use it to:
To learn more about how we handle and protect your data, visit our privacy center.
Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.
To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.
Read our editorial policy to learn more about our process.