| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 4.18% | 2.51% | 1.97% |
The BlackRock Managed Income Fund posted a 2.57% return for Q2 2026, marginally outperforming its benchmark driven by equity positioning and an overweight to U.S. growth stocks. The fund rotated from international high-dividend exposure into targeted European banks and German infrastructure to capture fiscal spending, rate, and energy capital expenditure tailwinds, then later shifted from European equity futures into S&P 500 Index futures and added TOPIX futures. Equity security selection was the primary driver of positive performance, with U.S. growth equities benefiting from improved investor sentiment and emerging market holdings in Taiwan and Korea gaining from AI investment and greater market breadth. Detractors included U.S. Treasury futures positioning as intermediate maturities sold off more than longer-dated ones, and floating rate loans performed poorly due to AI-related disruption concerns. The manager remains constructive but selective, favoring the United States given stronger earnings visibility while pursuing selective opportunities in markets with improving earnings breadth, attractive valuations, and AI-related investment support. The base case is that core inflation will continue to decline, allowing the Federal Reserve to potentially remain on hold for longer than markets have priced in.
The fund seeks consistent income through a diversified, risk-managed approach that favors U.S. growth equities given stronger earnings visibility, while selectively rotating into targeted opportunities in European banks, German infrastructure, and Asian markets benefiting from AI investment and improving earnings breadth.
The manager remains constructive but selective. U.S. activity is resilient with initial jobless claims below their 12-month average, improved payroll growth, and expansionary leading indicators. Equities are expected to stay supported by positive earnings revision breadth and earnings growth that has more than offset price appreciation. The base case is that core inflation will continue to decline, allowing the Federal Reserve to potentially remain on hold for longer than markets have priced in. Regionally, the United States is favored given its stronger earnings visibility, while selective opportunities are being pursued in markets with improving earnings breadth, attractive valuations, and AI-related investment support.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jul 29 2026 | 2026 Q2 | ^GSPC | AI, Asia, dividends, earnings, Europe, growth, Infrastructure Spending, rates | - | BlackRock Managed Income Fund delivered 2.57% in Q2 2026, outperforming through overweight U.S. growth equities and selective rotations into European banks, German infrastructure, and Asian AI beneficiaries. The manager favors the United States given stronger earnings visibility while pursuing targeted opportunities where improving earnings breadth and AI investment provide support. Core inflation is expected to decline, allowing the Fed to remain on hold longer than markets anticipate. |
| May 6 2026 | 2026 Q1 | - | Diversified, dividends, fixed income, income, Multi-Asset, risk management | - | BlackRock Managed Income Fund underperformed in Q1 2026 due to equity selection challenges amid AI disruption concerns. Managers actively repositioned toward U.S. dividend, defense, and infrastructure themes while reducing international exposure. Despite Iran conflict uncertainty, they remain constructive on U.S. equities given reasonable valuations and strong fundamentals, preferring defensive income sources over tight credit spreads. |
| Feb 8 2026 | 2025 Q4 | - | Allocation, credit, dividends, duration, equities, income | - | BlackRock's Managed Income Fund posted 1.37% Q4 returns despite underperformance from equity selection and international underweights. The team tactically increased emerging market exposure and rotated toward healthcare and defense stocks while trimming growth exposure. Managers favor equities over credit going forward, expecting dividend-oriented strategies to benefit from broadening market leadership and resilient earnings growth. |
| Oct 28 2025 | 2025 Q3 | - | AI, credit, duration, Equity, fixed income, inflation, Trade Policy | MSCI | BlackRock's Managed Income Fund posted strong Q2 returns through positive equity selection and tactical positioning. Managers increased equity exposure, particularly international, while reducing U.S. duration. They expect stocks to grind higher with earnings growth, supported by AI optimism and pro-growth policies, while avoiding long duration bonds due to inflation risks. |
| Aug 11 2025 | 2025 Q2 | - | AI, credit, duration, Equity, fixed income, inflation, Trade Policy | - | BlackRock's Managed Income Fund posted strong Q2 returns through tactical equity and fixed income positioning. Managers increased international equity exposure while reducing U.S. duration, benefiting from AI optimism and improved trade sentiment. They expect continued stock gains aligned with earnings growth while avoiding long duration bonds due to inflation risks. |
| Mar 31 2025 | 2025 Q1 | - | credit, Defensive, fixed income, Multi-Asset, rates, risk management, tariffs | - | BlackRock Managed Income Fund delivered 2.32% returns in Q1 2025 through defensive positioning amid tariff concerns. The fund trimmed equity and high yield exposure, added Russell 2000 hedges, and built long yen positions. Treasury futures and investment grade credit drove performance while managers expect economic growth headwinds from trade policy impacts. |
| Dec 31 2024 | 2024 Q4 | - | dividends, duration, fixed income, Multi-Asset, risk management, Yield | - | BlackRock's Managed Income Fund posted -2.19% in Q4 as rising rates hurt duration positioning and dividend stocks declined. The team maintained pro-risk exposure while tactically trimming equities and adding duration. They expect positive 2025 sentiment with modest risk asset returns, monitoring potential policy volatility from the new administration. |
| Sep 30 2024 | 2024 Q3 | - | Conservative, dividends, income, Multi-Asset, rates | - | BlackRock's Managed Income Fund posted 5.11% returns in Q3 2024, led by U.S. dividend equities and government bonds following the Fed's 50bp rate cut. Managers increased U.S. equity exposure while reducing emerging markets and cash. They expect strong but decelerating U.S. growth and plan to maintain elevated equity allocations while remaining selective on positioning. |
| Jun 30 2024 | 2024 Q2 | MSFT | Conservative, dividends, fixed income, income, rates | - | BlackRock's Managed Income Fund delivered 0.77% in Q2 through floating rate exposures and dividend growth equities. The fund avoids long duration assets due to poor valuations and fiscal concerns, instead focusing on carry opportunities in floating rate and credit markets. Managers expect continued U.S. growth but remain selective, maintaining higher equity exposure for dividend growth opportunities. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q2 |
AIThe fund benefited from holdings in Taiwan and Korea that continued to gain from artificial intelligence investment and greater market breadth. AI-related investment is cited as providing support for selective regional opportunities. However, floating rate loans performed poorly due to AI-related disruption concerns affecting specific issuers. |
Taiwan Korea Disruption |
EarningsThe manager believes equities will stay supported by positive earnings revision breadth and earnings growth that has more than offset price appreciation, leading to more attractive valuations. The United States is favored given its stronger earnings visibility, while improving earnings breadth in select markets provides additional support. |
Valuations Growth Breadth | |
RatesThe base case is that core inflation will continue to decline as tariff effects fade and shelter weakens, allowing a data-dependent Federal Reserve to potentially remain on hold for longer than markets have priced in. U.S. Treasury futures positioning detracted as intermediate maturities sold off more than longer-dated ones. |
Federal Reserve Inflation Treasuries | |
Infrastructure SpendingThe fund rotated into targeted German infrastructure exposure, which reflected fiscal spending, rate, and energy capital expenditure tailwinds. This positioning was part of a broader rotation from international high-dividend exposure into European banks and German infrastructure. |
Germany Fiscal Energy | |
| 2026 Q1 |
AIThe fund experienced detractors from equity selection as concerns about AI disruption fueled market rotation into defensive high dividend sectors. The managers have positioned into AI enabler stocks as a thematic area of focus. |
AI Disruption Technology Enablers |
DefenseDefense is highlighted as one of the thematic areas the fund has leaned into within their equity positioning strategy. |
Defense Thematic Positioning | |
InfrastructureInfrastructure is mentioned as a thematic area of focus, with specific positioning in infrastructure software positions within the equity allocation. |
Infrastructure Software Thematic | |
DividendsThe fund maintains exposure to U.S. dividend equities and uses high dividend benchmarks. However, their growth tilt within dividend equities was unhelpful during the quarter as markets rotated to defensive high dividend sectors. |
Dividends High Yield Income | |
| 2025 Q4 |
AIAI remains transformative but markets are shifting from hype to show me the money phase. The industry has spent over $400 billion on capex while producing roughly $50 billion in revenues. Physical constraints like power shortages and build delays are challenging assumptions of frictionless scaling. |
Artificial Intelligence Technology Capex Infrastructure Valuations |
Private CreditPrivate markets are finally offering opportunity as supply and demand balance has shifted. Traditional institutions are over-allocated, distributions have dried up, and scarcity of capital gives patient liquidity providers leverage on price and terms. Launching a private markets fund in Q1 2026. |
Private Markets Illiquid Strategies Secondaries Credit | |
Commercial Real EstateReal estate is where price and replacement cost have meaningfully diverged. Valuations have fallen approximately 20% since 2022 while construction costs have risen 20-30%. This gap creates a powerful setup for patient capital to buy high-quality assets below replacement cost. |
Real Estate Valuations Construction Costs Refinancing | |
| 2025 Q3 |
AIFurther artificial intelligence optimism contributed to positive equity performance amid improved trade sentiment and resilient economic data. AI investment ripple effects are expected to support pro-growth policies going forward. |
Artificial Intelligence Technology Growth Investment Optimism |
Trade PolicyMarkets rebounded after early pullback supported by improved trade rhetoric. While tariff concerns may still cause short-term volatility, managers believe the worst is over as investors shift focus to pro-growth policies. |
Tariffs Trade Volatility Policy Growth | |
InflationManagers avoid long duration given inflation risks and fiscal deficits. Inflation concerns influence duration management and fixed income positioning decisions. |
Duration Fixed Income Fiscal Risk Bonds | |
| 2025 Q2 |
AIFurther artificial intelligence optimism contributed to positive equity selection and market performance. AI investment ripple effects are expected to support pro-growth policies and market advancement. |
Artificial Intelligence Technology Growth Investment Optimism |
Trade PolicyTariff concerns may cause short-term volatility, but managers believe the worst is over. Markets rebounded after early pullback supported by improved trade rhetoric. |
Tariffs Trade Volatility Policy Rhetoric | |
InflationManagers avoid long duration given inflation risks and fiscal deficits. Inflation concerns influence duration management and fixed income positioning. |
Inflation Duration Fiscal Deficits Risk | |
| 2025 Q1 |
Trade PolicyThe fund reduced risk due to potential negative impact of tariffs on economic growth, which was thought to be underrepresented. Tariffs are expected to impact real incomes and lead to slower consumption and GDP growth. A policy focus shift from trade deficits to deregulation and tax cuts could provide some reprieve in the second half of the year. |
Tariffs Economic Growth GDP Trade Deficits Deregulation |
CreditCredit exposures have been a key stabilizer during periods of volatility this year. The fund continues to view credit as a valuable source of both income and returns. U.S. investment grade credit and agency mortgages performed well during the quarter. |
Investment Grade Agency Mortgages Income Volatility Stabilizer | |
RatesTreasury futures used to manage duration were the largest contributor to returns amid a rally in interest rates. The fund uses derivatives to manage interest rate sensitivity as part of its risk management approach. |
Treasury Futures Duration Interest Rates Derivatives Risk Management | |
| 2024 Q4 |
RatesThe 10-year Treasury yield ended the quarter at 4.57%, its highest levels since April, driven by concerns about fewer Fed rate cuts in 2025 and the U.S. fiscal deficit. Duration positioning was among the biggest detractors within fixed income. The team tactically added duration at more attractive levels following the late-year rates sell-off. |
Duration Treasury Fed Yield Interest |
DividendsInternational dividend stocks were the largest detractor to performance, while U.S. dividend stocks also weighed on performance. However, equity selection within covered calls yielded a marginally positive return, showing some success in the dividend-focused equity strategy. |
Dividend Covered International Equity Income | |
Risk AppetiteThe fund remained pro-risk during the quarter, though the team trimmed some equity exposure in late December given strong year-to-date returns and the potential for policy-driven volatility in 2025. Risk assets should perform well in their view, though returns may be modest after two strong years. |
Pro-risk Equity Volatility Policy Exposure | |
| 2024 Q3 |
DividendsU.S. dividend equities led performance during the quarter, driven by robust earnings, a strong labor market, and resilient consumer spending. The fund increased U.S. equity exposure using dividend stocks and covered calls to take advantage of improved market sentiment. |
Dividend Stocks Covered Calls Income Equity Exposure |
RatesThe Federal Reserve's 50-basis-point interest rate cut in September boosted sentiment and caused government bonds to rally as falling rates lifted prices. The fund expects the Fed may adopt a more measured approach to rate cuts given recent data exceeding expectations. |
Interest Rates Fed Policy Bond Rally Monetary Policy | |
| 2024 Q2 |
RatesThe fund maintains very light exposure to long duration assets due to poor valuations and concerning fiscal outlook. Floating rate exposures including collateralized loan obligations and bank loans were the largest contributors to performance driven by coupon income. The fund prefers to look for better carry opportunities across spread assets in floating rate markets. |
Floating Rate Duration Yield Curve Interest Rates Carry |
DividendsThe fund reduced equity risk via global dividend stocks in May following a market rebound. In June, they added dividend growth equities as part of their strategy. Equity exposure remains at the higher end of the historical range due to strong earnings growth and more inexpensive valuations for dividend growth expressions, especially in the United States. |
Dividend Growth Equity Income Yield Dividend Stocks |
| TICKER | COMMENTARY |
|---|---|
| ^GSPC | We later sold European equity futures to add S&P 500 Index futures, then added TOPIX futures, which was funded from U.S. and European futures exposure. |
| Ticker | Put/Call | Amount Bought | Shares Bought | % Change | Weight % |
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