Royal London BlackRock Emerging Markets Local Government Bond Index Fund

The RL BlackRock Euro Government Bond Index Fund invests mainly in euro-denominated government bonds from the EMU government bond market. It is passively managed and seeks to track the return of the FTSE EMU Government Bond Index rather than try to outperform it. The holdings shown are heavily weighted toward government issuers such as Germany, France and the Netherlands.

The RL BlackRock Euro Government Bond Index Fund is described as suited to a medium-term investment horizon of 3 to 5 years, and the factsheet also notes a recommended horizon of at least 7 years. Because it has high bond exposure, it is expected to be less volatile than equities. That means its value may still move, but usually not as sharply as shares.

The RL BlackRock Euro Government Bond Index Fund is exposed to market fluctuations, capital returns risk, currency risk, counterparty risk, liquidity risk and sustainability risks. Currency risk means exchange-rate movements can affect returns if investments or cash flows are not in the investor’s home currency. Capital returns risk means the amount invested can go down as well as up, so an investor may get back less than they put in.

The RL BlackRock Euro Government Bond Index Fund uses a passive approach, so it aims to mirror the performance of its benchmark rather than rely on stock-picking or bond selection decisions. Its benchmark is the FTSE EMU Government Bond Index. This makes the fund focused on matching the euro government bond market’s return profile, including both income and capital movement.

The RL BlackRock Euro Government Bond Index Fund has geographic exposure across EMU countries including France, Italy, Germany, Spain, Belgium, the Netherlands, Austria, Portugal, Ireland and other issuers. Its top holdings include several Federal Republic of Germany bonds, as well as French and Dutch government bonds. This reflects its focus on the euro-denominated EMU government bond market.