"We continued to reduce the fund's allocation to preferred stocks based on the view that market volatility would spill over to the asset class, which had initially outperformed during the broader market selloff," said Michael Fredericks, who manages the $12 billion BlackRock Multi-Asset Income Fund , in a monthly letter distributed Friday.

The letter described the current 5 percent allocation to preferred stocks as a "historical" low for the eight-year old fund, which has carried as much as 11 percent exposure to the asset. The fund currently has a one-year return, through Thursday, of negative 2.3 percent, Lipper said.