Fund Merger - Blackrock UK Dynamic Fund

Reason for and advantage of the merger 

Following a review of the funds within their UK equity suite, BlackRock concluded that they had a significant overlap in both the investment focus and the underlying assets of the UK Dynamic Fund and the UK Fund. They therefore believed it to be beneficial to amalgamate the two funds, allowing their UK Equity Portfolio management team to take a more focused approach to each UK equity fund in the suite. 

By combining the two funds BlackRock expect that this will result in some economies of scale which will be advantageous to investors. They also believe that the BlackRock UK Fund is a viable, recently stronger performer and cost neutral alternative to the BlackRock UK Dynamic Fund for investors who wish to continue investing in a core UK equity fund. 

Investment objective information for the merging funds 

Although the investment strategies of the two merging funds are very similar, the UK Dynamic Fund had an emphasis on shares of companies which exhibited either growth or value characteristics whereas the UK Fund’s investment policy emphasises shares with growth characteristics only. 

Both funds invest at least half of their portfolios in FTSE 100 stocks and have the freedom to invest their remaining assets in mid or small cap stocks. The UK Fund is BlackRock’s UK equity team’s core fund offering. 

Investment objective of the BlackRock UK Dynamic Fund (merging fund) 

The aim of the BlackRock UK Dynamic Fund is to achieve long terms capital growth for investors. The Fund invests primarily in the shares of companies incorporated or listed in the UK which we consider exhibit either growth or value investment characteristics, placing an emphasis as the market outlook warrants. The Fund may also invest in collective investment schemes. 

The Annual Management Charge is 1.50% 

Investment objective of the BlackRock UK Fund (receiving fund) 

To achieve long-term capital growth for investors. The Fund invests primarily in the shares of larger companies incorporated or listed in the UK. The Fund may also invest in collective investment schemes. 

The Annual Management Charge is 1.50%. 

What next? 

Due to the merger, any holdings in the BlackRock UK Dynamic Fund have been automatically transferred into the BlackRock UK Fund. As the merging fund has a lower unit price than the receiving fund, investors will notice that they now hold less units even though the value transferred between the funds is the same amount. 

Letters have been issued to affected policyholders and their servicing agents advising them of the fund merger. Sample letters can be viewed opposite.