Key Morningstar Metrics for BlackRock Global Funds - World Financials Fund
- : BronzeMorningstar Medalist Rating
- : ★★★★Morningstar Rating
- : Above AverageProcess Pillar
- : Above AveragePeople Pillar
- : Above AverageParent Pillar
BGF World Financials is managed by an experienced portfolio manager who is supported by deep analytical resources and expertly executes a well-defined, distinctive, but potentially volatile strategy. The People and Process ratings are maintained at Above Average.
Vasco Moreno demonstrates clarity of thought and deep insight into industry dynamics, and he articulates investment cases well. He isn’t afraid to express his convictions in the portfolio or to make dramatic changes when his top-down views and fundamental analysis warrant a change of course. While key-person risk remains high, Hashim Bhattee, who became a dedicated analyst on the strategies managed by Moreno in September 2022, was named comanager of the strategy in July 2024. The duo is supported by BlackRock’s global team of financial analysts, which encompasses more than 20 specialists covering the sector, giving the strategy impressive research firepower in a sector that can be complex and opaque to analyze.
The investment approach seeks to identify stocks that offer value relative to their peers and a specific catalyst with the potential to unlock that value. Moreno combines top-down analysis with fundamental bottom-up stock research in three different research phases before constructing a high-conviction portfolio of approximately 30-50 individual positions.
Under Moreno’s leadership, the strategy can go where he sees opportunities, and portfolio exposures can change quickly as a result. The strategy can exhibit higher volatility and idiosyncratic risk than traditional peers. Combined with emerging-markets exposure and a mid-cap bias, this elevates its risk profile and doesn’t make it suitable for every investor.
An experienced portfolio manager who can keep emotions in check during market events and periods of heightened volatility is paramount to the strategy’s success, and Moreno has demonstrated his ability to navigate such challenging markets well. He implements the strategy effectively, but dramatic swings in performance relative to peers are not unusual.
BlackRock Global Funds - World Financials Fund: Performance Highlights
Vasco Moreno has executed the strategy effectively, though significant performance shifts relative to peers are typical. Because the portfolio can be very distinctive and bold, annual returns may vary significantly relative to peers and the sector equity financial-services category index. In 2022, for example, the strategy’s D2 share class lagged the category index by 9.4% as positions in Bank of America, Silicon Valley Bank, Erste Group, and Signature Bank posted double-digit losses, and the fund’s 0.5% position in Russian Sberbank was fully written off. The year 2023 was an even more tumultuous one as the strategy took a beating when the unrest surrounding US regional banks hit the fund hard, as the collapse of portfolio holdings Signature Bank and Silicon Valley Bank alone cost 320 basis points of performance. Nonetheless, effective stock selection among European banks more than compensated for the blow. A phenomenal recovery in the aftermath put the fund back on its feet, with strong contributions from Unicredit, Western Alliance, First Citizens, and Inter & Co, whose stock price doubled that year. It is illustrative of the wild performance swings investors may have to absorb from time to time, which doesn’t make the strategy suitable for every investor. Effective stock selection within banks and capital markets drove the outperformance in 2024. The first half of 2025 was mixed, with banks and capital market stock selection again contributing positively, but some struggles within payments caused the strategy to lag the category average, though it remained ahead of the category index. An experienced portfolio manager who can keep emotions under control during market events and periods of heightened volatility is paramount for the strategy to be successful, and Moreno has demonstrated his ability to navigate such challenging markets well. The strategy’s punchiness results in elevated risk metrics, such as standard deviation, drawdowns, and beta. Nonetheless, effective stock-picking, especially among banks, has compensated investors for the higher risk during Moreno’s tenure.
