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Issued by 1OAK Capital Limited, authorised and regulated by the Financial Conduct Authority.  1OAK Capital Ltd (1OAK) (Registered in England & Wales Number: 06890293; FCA registration number 501453) provides fund management services for its customers. 1OAK Capital Limited is authorised and regulated by the Financial Conduct Authority. Registered Office of 50 Sloane Avenue London SW3 3DD.

BlackRock Rebalance

Rebalance commentary   

BlackRock has reduced their ‘risk-on’ view across all their portfolios in its latest rebalance, moving the portfolio further towards the centre of its risk bands. This move was promoted by the less than successful year the equity markets have had so far. BlackRock has also looked to reposition the portfolio due to the ongoing conflict in Ukraine. The conflict has increased pressure on what were already stressed supply chains which has subsequently caused commodity prices to skyrocket,  both of which increase the risk of stagflation.

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Equities 

We see small uptake in our overall equity exposure in the latest rebalance, increasing allocation by 2.50%. The most significant modification within the portfolio is within U.S equities, increasing exposure by 3.75%. BlackRock has reduced exposure to European Equities (-2.63%) due to the rocketing energy prices and rising inflation within Europe. This has been tilted into Japanese equities (+2.63% to diversify the portfolio. They have further reduced allocation to Emerging markets (-1.50%), there has been a slight increase in U.K equities (0.50%) whilst our position in Pacific ex japan remains untouched.

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Non-Equity Sleeve

We saw only a few adjustments to the allocation in the fixed income sleeve. BlackRock removed exposure to 7-10yr Treasuries and reduced exposure to 20yr+ Treasuries to 2.75% in order to decrease duration risk. BlackRock has added E.M Government bonds USD (0.50%) to the portfolio, and increased exposure to Treasury Inflated protected securities by 0.50%.  They add Commodity Swap Exposure (1.00%) to the portfolio to protect the portfolio against the impact of a macro environment where breakeven inflation and nominal interest rates rise.

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1OAK Rebalance April 2022