BlackRock becomes the latest firm to launch a fund for emerging markets, it announced today.

BlackRock becomes the latest firm to launch a fund for emerging markets, it announced today.

Following the increasingly popular trend, the BlackRock Strategic Funds Emerging Market Allocation Fund aims to deliver equity-like returns without the volatility associated with the markets. As the world’s largest emerging markets fund manager, its solution is to urge investors to commit throughout unstable periods, it said in a statement.

Emerging market indices have been hit in recent months by the prospect of a slowdown in the US Federal Reserve's quantitative easing programme. However, the launch of this fund suggests that asset managers still believe there are long-term benefits to emerging market exposure.

“A £100,000 ($164,488) investment in both emerging markets equities and bonds since the turn of the century would have returned £329,317 ($541,738). Missing out on the top 25 days during this period would have resulted in a return of £226,470 ($372,591),” Alex Hoctor-Duncan, head of retail for Europe, Middle East and Africa said.

Led by Jeff Shen, head of BlackRock Emerging Markets, the fund has the ability to invest in any asset class across traditional emerging and frontier markets. It also includes ‘alternative’ strategies like long/short in its portfolio. The weighting of each component is optimised for a long-term smooth ride but can vary tactically according to market conditions.

Despite fluctuating risk levels and opportunities, New York-headquartered BlackRock has set its sights on the “diversity and depth of emerging market territories,” according to Shen.

Earlier this month, both Allianz Global Investors and Fundsmith both launched emerging market funds (see here and here). The recent interest in the area suggests continued interest despite recent market problems.

The latest BSF launch follows two debt funds created in February last year: the BlackRock Global Funds Emerging Market Corporate Bond Fund, and the BGF Emerging Markets Investment Grade Bond Fund.