BlackRock launches Asean equity strategy under EQDP, with a small and mid-cap focus

[SINGAPORE] BlackRock has launched a quantitative fund strategy investing across the Asean equity space under the Monetary Authority of Singapore’s (MAS) Equity Market Development Programme (EQDP).

The fund will be available to both institutional investors and Singapore-based retail investors, the global asset manager said on Monday (Apr 27).

The strategy, named the Asean Systematic Active Equity (SAE) Strategy – BF1 Advantage Asean Equity Fund, will see the fund typically hold between 100 and 300 securities.

Around half of the portfolio is allocated to Singapore equities, with a focus on small and mid-cap companies where “market inefficiencies can be more pronounced”, said Blackrock.

It will invest across both developed and emerging Asean markets, including Singapore, Malaysia, Thailand, Indonesia, the Philippines and Vietnam, without specific industry constraints.

“For many investors, Singapore plays a natural and important role within a broader Asean exposure while not typically considered a standalone equity allocation in client portfolios both on the institutional and retail side,” said Filip Mena-Berlin, portfolio manager of SAE and senior investment strategist at Blackrock in an exclusive interview with The Business Times.

He added that Asean has a “natural place” in many client portfolios as it is a high-growth region with a large, young population – which in turn supports a sizeable consumer base.

BlackRock was appointed by MAS in November 2025 as part of the second batch of six asset managers under EQDP. The other managers include Amova Asset Management, AR Capital, Eastspring Investments (Singapore) and Lion Global Investors. The six asset managers collectively were allocated S$2.85 billion.

The EQDP is an initiative aimed at deepening investor engagement and improving liquidity in Singapore’s equities market.

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A third batch of managers is expected to be announced later this year, with most managers from earlier rounds either already launching or preparing to launch their funds.

BlackRock appears to be the only manager so far under the EQDP with a broader Asean-focused mandate, while others remain primarily Singapore-centric in their approach.

JPMorgan Asset Management, which has yet to officially launch its fund, has previously indicated that its strategy will focus on small and mid-cap Singapore stocks, alongside selected high-yielding opportunities in the Asia-Pacific region.

Other managers remain Singapore-focused. For instance, Manulife Investment Management’s Singapore All-Cap Equity strategy allocates about 40 per cent of its portfolio to small- and mid-cap companies, while maintaining significant exposure to large-cap names.

Meanwhile, Fullerton’s Singapore Value-Up Fund will invest exclusively in Singapore-listed securities, spanning large, mid and small-cap stocks, initial public offerings and secondary listings.

Another fund manager Avanda has made its Singapore equity strategy available only to accredited and institutional investors, with about half of its portfolio holdings being Singapore Exchange-listed mid-caps in the range of S$500 million to S$5 billion in market capitalisation.

Investment approach

Blackrock’s Asean SAE strategy is aligned with the MSCI Asean Investable Market Index (IMI), which covers roughly 350 stocks across the region and is widely used by global institutional investors as a regional benchmark. It has almost half its exposure in Singapore, noted Mena-Berlin.

“On country weights, we will look very much like the underlying benchmark we use,” he said, referring to the IMI.

The index includes both developed markets such as Singapore and emerging markets across Asean, with a balanced representation across large, mid and small-cap companies.

On whether the strategy’s broader Asean allocation could dilute efforts to uplift Singapore equities, Mena-Berlin said the exposure is complementary rather than substitutive.

“The Singaporean market plays a distinct role within Asean and helps diversify the region (and thus the exposure for investors) across both emerging and developed (Singapore) markets,” he said.

He noted that Asean equities are trading at relatively attractive valuations compared to global peers alongside relatively higher dividend yields.

In terms of market structure, Mena-Berlin sees the region differing significantly from other markets dominated by tech stocks. This can provide diversification benefits for global investors.

Given BlackRock’s global scale and institutional reach, he said, the firm is “well positioned to help channel capital to the Asean region from all corners of the globe”.

By expanding the investable universe, the strategy’s “alpha” opportunity is also enhanced.

“Higher breadth tends to mean higher efficacy and, by design, aims to achieve better returns potential for investors,” added Mena-Berlin.

Alpha refers to a measure of an investment’s performance that indicates its ability to generate returns exceeding its benchmark.

Blackrock’s product highlights sheet indicated that its Asean SAE Strategy seeks long-term capital growth. It will invest at least 70 per cent of its net asset value in equity and equity-linked instruments of companies domiciled, listed or primarily operating in Asean markets.

It may also invest up to 100 per cent in emerging markets, and does not focus on any specific sector.

The strategy uses proprietary quantitative models, which can be mathematical or statistical in nature, to implement a systematic stock selection approach. These models rank stocks broadly based on company fundamentals, market sentiment and macroeconomic themes.

Building on this approach, Mena-Berlin said the portfolio is designed to take active risk primarily at the stock level, rather than through broad country or sector bets. The strategy uses alternative data and artificial intelligence to identify which companies are performing relatively better than others, and how those trends are evolving.