In the second quarter of 2025, the BlackRock Managed Volatility V.I. Fund delivered an impressive performance, achieving a 2.69% return for its Class I shares. This figure notably outstripped its designated benchmark, the BofA Merrill Lynch 3-month T-bill Index, which registered a return of 1.04% over the same period. This significant outperformance underscores the fund's strategic management and its ability to navigate diverse market conditions effectively.
The fund's success during this period can be attributed to several well-executed investment strategies. A key driver was its tactical positioning in relative value opportunities across various bond and currency markets. By identifying and capitalizing on pricing discrepancies and yield differentials, the fund enhanced its returns. Furthermore, a directional long position in global equities contributed substantially to its positive results, indicating a confident outlook on the worldwide stock market's growth prospects.
Beyond its equity investments, the BlackRock Managed Volatility Fund also adopted a nuanced approach to interest rate exposure. It held directionally short duration positions, specifically in the markets of the United States, Japan, and Germany. This strategy suggests an anticipation of rising interest rates or a desire to mitigate interest rate risk in these major economies, further diversifying its risk and return profile.
The commentary released as of June 30, 2025, highlighted these factors as central to the fund's strong showing. The combination of astute relative value trades, a positive outlook on global stock markets, and carefully managed interest rate sensitivities allowed the fund to not only meet but exceed the expectations set by its benchmark, providing a compelling outcome for its investors.
The robust performance of the BlackRock Managed Volatility V.I. Fund in the second quarter of 2025 demonstrates a successful blend of proactive management, strategic asset allocation, and insightful market analysis, leading to a notable lead over its benchmark.