(Bloomberg) - Bond traders weighing the impact of higher rates, debt ceiling worries and a possibly imminent recession may want to heed BlackRock’s Rick Rieder, who isn’t letting these things ruin a good time.
“It’s one of the most fun markets that I’ve been in in a long time because there’s so many dynamic changes taking place,” the chief investment officer for global fixed income at BlackRock Financial Management Inc. told Bloomberg Television’s The Open on Wednesday. “We’re buying quality assets. We’re buying things in the front end of the yield curve. Commercial paper at 6%! These are crazy levels.”
Rieder said BlackRock has been buying agency mortgages, investment grade credits and emerging market bonds. Staying on the short end of the yield curve while “layering in some agency mortgages, a bit of investment grade credit to get a bit more interest-rate exposure,” is part of his team’s strategy.
In a sign that BlackRock has been deploying its fire power, Rieder said the team’s cash allocation has “come down a lot.”
He added that the team has moved to neutral on equities and bought defensive stocks, staples and some tech stocks as well.
“The big challenge you have in fixed income today is if I give up cash holdings like commercial paper I give up yield,” Rieder said. “That’s not something people are used to who manage fixed income.”
(Corrects Rieder’s title in second paragraph)
By Eva Szalay and Jonathan Ferro
