Morningstar

BGF Global Allocation I2 (EUR)

Analyst Report
Morningstar's Take
|07/05/2025
by Jason Kephart
On April 16, BlackRock announced portfolio manager David Clayton will retire on June 30, 2024. Clayton joined the global allocation team in 2010 and has been a named manager since 2017. His primary focus was leading the fundamental equity sleeve of the portfolio. Sarah Thompson, a member of the global allocation team since 2018, will take over his duties on the fund. Her background is primarily in credit research; before joining the global allocation team she spent five years as BlackRock’s global director of credit research. As part of the transition, Thompson will lead a newly formed strategic investment group with three fundamental sector equity leaders. We don’t expect the changing of the guard to alter the fundamental equity selection process. The continued presence of lead portfolio manager Rick Rieder and his senior investment team of Russ Koesterich, Kate Moore, Randy Berkowitz, and Thompson continue to support a High rating for People.
 
Few global balanced funds match BlackRock Global Allocation's disciplined risk oversight, strategic thinking, and depth of resources.

BlackRock's global fixed-income CIO Rick Rieder has skillfully led this strategy since April 2019, supported by seasoned co-leads Russ Koesterich, Randy Berkowitz, and Sarah Thompson. While the leadership bench has evolved in recent years with the retirement of fundamental equity lead David Clayton in mid-2024 and the departure of thematic equity specialist Kate Moore at year-end 2024, the core team remains well-equipped to steer the portfolio forward.

The transitions following those departures highlight the depth and resilience of the team. Thompson, now head of fundamental equity, has been with the group since 2018 and previously served as BlackRock's global director of credit research for five years—a role that had her working closely with Rieder, the strategy’s lead architect. Notably, she was added to the team even before Rieder's arrival, thanks to her expertise in credit research, where evaluating a company's full capital structure—from debt to equity—was critical to making informed investment decisions.

Moore's role has been taken over by Dez Desai, a BlackRock veteran who joined the firm in 2009 during the acquisition of R3 Capital Partners, the hedge fund previously led by Rieder. These long-standing professional relationships provide meaningful continuity, helping ensure a smooth leadership transition when senior team members move on.

Continuity is especially important for a strategy with as many levers to pull as this one, both in generating returns and managing risk. Since taking the reins, Rieder has evolved the strategy's top-down approach. Whereas previous leadership emphasized relative valuations—often favoring regions like Japan and Europe—Rieder's macro-driven lens has shifted the portfolio's equity exposure toward the US, reflecting stronger growth expectations over the next few years.

The team has also leaned into nontraditional, high-frequency data sources, such as web traffic, to better gauge where market expectations may be misaligned with underlying economic activity. This added layer of insight helps fine-tune portfolio positioning.

Risk management has likewise grown more sophisticated. The strategy draws on BlackRock's extensive risk infrastructure to avoid unintended bets and exposures. With such a broad mandate, having the tools and discipline to monitor and adjust portfolio risk is a critical edge. Altogether, these enhancements contribute to a more robust and adaptive process than many peers can offer.

 
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Morningstar Pillars
PeopleAbove Average
ParentAbove Average
ProcessHigh
 
Morningstar Medalist RatingMorningstar assigns the Medalist Rating to funds that are qualitatively and quantitatively assessed through manager research and algorithmic processes. The assessment turns on three key “pillars” – People, Process, and Parent – that yield an estimate of how well a fund will perform before fees but after adjusting for risk.
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