We have partnered with BlackRock to bring you our very first international equity portfolio. The iShares Enhanced Strategic International Managed Portfolio is a dynamically managed diversified portfolio made up of 10-20 ETF holdings, providing exposure to over 2,500 underlying securities. Continue reading to learn more about BlackRock, their investment philosophy and portfolio construction framework.

Investment philosophy

BlackRock believes that superior investment outcomes are best achieved through a disciplined, objective investment process. The investment process seeks to harvest return premia, while managing risks and implementation costs through optimisation-based portfolio construction. 

BlackRock makes use of fundamental-based, top-down macroeconomic analysis in building long-term return forecasts across regions and sectors. This is balanced with proprietary portfolio and risk management systems, enabling them to produce a diversified international equity portfolio that is benchmark aware with controlled levels of active risk. BlackRock integrates trading costs into the portfolio construction methodology to help identify the optimal trade-off between expected returns, risks and the certainty of costs.

Portfolio construction

BlackRock has adopted a four-step framework for the managed portfolio construction process.

1. Strategic country and sector allocations 

These strategic allocations are guided by BlackRock’s long-term return expectations, risk and correlation assumptions across countries and sectors. BlackRock utilises a mean-variance optimisation framework to determine the optimal risk adjusted strategic weights, while also controlling for tracking error against the benchmark. This process is repeated annually in order to evolve the portfolio and incorporate updates to the expected return and risk assumptions. 

2. Dynamic tilting 

Tactical country and sector tilts relative to the strategic holdings are made 4-6 times per annum based on a set of market-aware proprietary signals including valuation insights, momentum and fundamental economic indicators. The tactical overlay process seeks to add value by deviating away from the long-term strategic weights and respond to changing market conditions. 

3. Portfolio implementation

The portfolio is constructed using a range of ASX-listed iShares ETFs that individually aim to track country and sector indices across both developed and emerging markets, along with smart beta exposures such as Minimum Volatility. These low-cost, transparent ETFs allow for efficient portfolio implementation and act as natural candidates for the dynamic tilting process. 

4. Monitor, assess and help protect the portfolio

BlackRock’s Aladdin® technology helps them better understand potential risk exposures with holdings-based analysis in addition to traditional, backward-looking performance analysis. They use detailed risk analytics and stress testing capabilities, in combination with portfolio manager insight to monitor the health of the portfolio.

About the investment manager

BlackRock is a global investment manager that has served the Australian market for over three decades, with a commitment to helping more people plan for their financial future. As a fiduciary to investors and a leading provider of financial technology, BlackRock helps millions of people build savings that serve them throughout their lives by making investing easier and more affordable.

The Australian investment team has been managing portfolios for Australian investors since 1992, leveraging the firm’s global capabilities and best practices to consistently deliver investment outcomes for their clients.


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Important information

The information on this page has been provided by NMMT Limited ABN 42 058 835 573, AFSL 234653 (NMMT). It contains general advice only, does not take account of your client’s personal objectives, financial situation or needs, and a client should consider whether this information is appropriate for them before making any decisions. It’s important your client consider their circumstances and read the relevant product disclosure statement (PDS), investor directed portfolio guide (IDPS Guide) and target market determination (TMD), available from northonline.com.au or by contacting the North Service Centre on 1800 667 841, before deciding what’s right for them.  

MyNorth Investment and North Investment are operated by NMMT. MyNorth Investment Guarantee is issued by National Mutual Funds Management Limited ABN 32 006 787 720, AFSL 234652 (NMFM). MyNorth Super and Pension (including MyNorth Lifetime), MyNorth Super and Pension Guarantee and North Super and Pension are issued by N.M. Superannuation Proprietary Limited (ABN 31 008 428 322, AFSL 234654 (NM Super) as trustee of the Wealth Personal Superannuation and Pension Fund (the Fund) ABN 92 381 911 598. NMMT issues the interests in and is the responsible entity for MyNorth Managed Portfolios. All managed portfolios may not be available across all products on the North platform. All of the products above are referred to collectively as MyNorth Products.  The information on this page is provided only for the use of advisers, it is not intended for clients. This page provides a brief overview of some of the benefits of investing in MyNorth Products. The adviser remains responsible for any advice/services they provide to clients including making their own inquiries and ensuring that the advice/services are appropriate and in accordance with all legal requirements. 

You can read the Financial Services Guide online for more information, including the fees and benefits that companies related to NMMT, N.M. Superannuation Proprietary Limited ABN 31 008 428 322, AFSL 234654 (N.M. Super) and their representatives may receive in relation to products and services provided.   

North and MyNorth are trademarks registered to NMMT.  

All information on this website is subject to change without notice. 

This material has been prepared with the co-operation of BlackRock Investment Management (Australia) Limited (BIMAL) ABN 13 006 165 975, AFSL 230 523. Comments made by BIMAL employees here represent BIMAL’s views only. This material provides general information only and does not take into account your individual objectives, financial situation, needs or circumstances. Before making any investment decision, you should obtain financial advice tailored to you having regard to your individual objectives, financial situation, needs and circumstances. Refer to BIMAL’s Financial Services Guide on its website for more information. This material is not a financial product recommendation or an offer or solicitation with respect to the purchase or sale of any financial product in any jurisdiction.