Latest news with #iSharesFlexibleIncomeActiveETF
Yahoo
30-06-2025
- Business
- Yahoo
'Buying Bonds In Europe Is Phenomenal': BlackRock's Rieder
BlackRock Global Fixed Income CIO Rick Rieder discusses the iShares Flexible Income Active ETF (ticker: BINC) and says "buying bonds in Europe is phenomenal." He also discusses the iShares 20+ Year Treasury Bond ETF (ticker: TLT) in an interview with Katie Greifeld, Eric Balchunas and Scarlet Fu.
CNBC
30-06-2025
- Business
- CNBC
BlackRock's Rick Rieder says there is a 'generational opportunity' for income right now
The high levels of income in the bond market right now are a "generational opportunity" for investors, according to BlackRock's Rick Rieder. "I've waited for two decades of my life for some deals," he said in an interview with CNBC, pointing to the years of low interest rates that ended in 2022. Bond yields move inversely to prices. That income is a priority now that bond duration is still no longer the reliable hedge it once was, explained Rieder, the firm's chief investment officer of global fixed income. In other words, fixed income hasn't necessarily offered a ballast against a drop in stock prices. "In a sense, the ability to deliver consistently high coupons to global portfolios can serve as something of a bulwark against equity market drawdowns, especially at a time when duration itself has failed to serve its traditional function," he wrote in the firm's mid-year outlook released Monday. Getting that income doesn't necessarily mean taking excess risk since companies have de-levered, paying down their debt during the post-Covid period, he added. However, the opportunity isn't going to last forever, Rieder told CNBC. He said he anticipates a boost in productivity and innovation from the "greatest technology revolution" that is now underway. That will bring down inflation and, eventually, interest rates, he added. Still, some labor softness could hit the economy in the near term, Rieder noted. Yet, he expects a pretty good second half of the year from a growth perspective — although more toward the last quarter. "A lot of corporate CEOs are sitting and waiting to see what would happen with regard to tariffs, and I think you unlock some of the spend in the capex [capital expenditures] and [research and development]," he said. President Donald Trump 's pause on reciprocal tariffs ends on July 8 and the deadline for a deal between the United States and Europe is on July 9. However, the president recently said he may not adhere to the deadlines, saying, " We can do whatever we want ." Where the opportunities lie The front and the belly of the curve remain the most attractive, said Rieder, who is also the portfolio manager of iShares Flexible Income Active ETF (BINC) . The exchange-traded fund has a 30-day SEC yield of 5.45% and a 0.40% net expense ratio. BINC YTD mountain iShares Flexible Income Active ETF year to date Rieder still favors European credit and peripheral sovereign bonds, like Spain and Italy. The yields are terrific and there isn't much concern about supply, he said. "If you're a dollar investor — and this is something that we also haven't seen in decades — we get a cross-currency swap benefit," Rieder said. "Everybody's trying to hedge their U.S. dollar exposure. Being a dollar investor you actually get the benefit and it's tremendous," he added. "We get an extra 2%, 2.5% benefit for being a lender in Europe and that makes all the difference in the world for a dollar investor." He also likes securitized products in the United States. They make up 35% of BINC's assets, with commercial mortgage-backed securities and non-agency MBS accounting for some of that allocation. Rieder has reduced BINC's allocation to investment-grade bonds, which now make up 7% of the ETF. Instead, he said he'd rather get the income from high-yield bonds or agency MBS, the latter of which has attractive income and is much more liquid than corporate bonds. Biggest risk in the market The biggest risk facing fixed-income investors right now is the rising federal deficit, Rieder said. Concerns about it have fueled volatility in the market, he said The U.S. budget deficit hit $316 billion for the month of May, according to the Treasury Department. "There is the risk we still have to keep doing these [Treasury] auctions," he said. "Long-end interest rates are extremely volatile and sensitive to inflation." While Rieder thinks inflation is coming down, he isn't sure that will happen in the next few months. "Longer term, I think we'll be able to outrun the debt," he said. Near term, "markets tend to sense vulnerability." "I watch every 10-year, 20- or 30-year auction," he added. "In the bond market, to me, it's almost a sigh of relief when they get them done."
Yahoo
28-05-2025
- Business
- Yahoo
2 trades BlackRock bond chief Rick Rieder told us he's making to help generate almost 7% yield
Rick Rieder sees bond market volatility as an opportunity amid economic policy shifts. He said short-duration Treasurys offer attractive yields as rate-cut expectations adjust. European high-yield bonds are appealing because of lower volatility and favorable currency swaps. It's been a particularly busy start to the year for BlackRock's bond chief, Rick Rieder — not that someone overseeing $3 trillion in assets has all that much spare time to begin with. The economic policy uncertainty that President Donald Trump has introduced has sent the bond market flailing in a way Rieder hasn't seen before. But the volatility isn't necessarily a bad thing. "There is change afoot. One of the great things about investing in this environment is it's not static," Rieder told Business Insider. "The reaction function to any piece of news can be really extreme," he added. "So markets go through these periods of illiquidity, and it just presents these great opportunities that, by the way, may only be there for 10 minutes, or an hour, or a day. But I've never seen markets move to such extremes." Rieder shared a few of those opportunities he's leaning into at the moment in his iShares Flexible Income Active ETF (BINC), which yields 6.6% and has grown to $9 billion in assets since launching in May 2023. One of them is the front end of the yield curve, or short-duration Treasurys. Yields on the two-year note had dropped from 4.3% last year to 3.6% in April as investors started to price in as many as five rate cuts from the Federal Reserve. But as rate-cut expectations have fallen, yields have risen back up to nearly 4%, making them more attractive. Front-end bonds also offer a hedge for economic volatility in the short term, allowing investors to clip a robust coupon without being locked in for too long. The long end of the curve, meanwhile, isn't acting as a recession hedge, Rieder said, with investors worried about inflation from tariffs and rising yields thanks to ballooning fiscal spending deficits. "I'd rather keep yield up and not have to worry about the volatility," Rieder said. "The long end is not a hedge," he added. "Its traditional offsetting risk function doesn't work today, and so until yields move significantly higher, I don't see any significant reason to own longer in interest rates." Long-end rates in Europe, however, are more attractive, Rieder said. He said he's betting on European B- and BB-rated high-yield bonds to deliver higher yields. This is because economic growth is slowing to a greater degree in Europe than in the US, and inflation is tamer, so the European Central Bank is likely to cut rates more aggressively. This has meant limited upside volatility for European rates. For example, while 10-year Treasury yields have surged from 3.99% to 4.43% since April 4, 10-year eurozone bond yields have been virtually flat, falling by just 3 basis points from 3.13% to 3.1%. When yields rise, bonds lose their value, and vice versa. "Taking some of your interest-rate risk in Europe versus the US — particularly versus long US — has been an exciting thing to be involved with," Rieder said. "Usually, US and European rates move together," he added. "Now you're seeing historic movements of European rates relative to the US, meaning European rates are much more stable." Plus, the dollar's weakness relative to the euro is icing on the cake. "Because of the cross-currency swap, you could buy Europe and you get a couple of percent of additional yield," Rieder said. To mitigate the downside risk of some of the higher-yield bonds in his portfolio, Rieder pairs them with high-quality assets like AAA collateralized loan obligations, he said. Read the original article on Business Insider Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
28-05-2025
- Business
- Yahoo
2 trades BlackRock bond chief Rick Rieder told us he's making to help generate almost 7% yield
Rick Rieder sees bond market volatility as an opportunity amid economic policy shifts. He said short-duration Treasurys offer attractive yields as rate-cut expectations adjust. European high-yield bonds are appealing because of lower volatility and favorable currency swaps. It's been a particularly busy start to the year for BlackRock's bond chief, Rick Rieder — not that someone overseeing $3 trillion in assets has all that much spare time to begin with. The economic policy uncertainty that President Donald Trump has introduced has sent the bond market flailing in a way Rieder hasn't seen before. But the volatility isn't necessarily a bad thing. "There is change afoot. One of the great things about investing in this environment is it's not static," Rieder told Business Insider. "The reaction function to any piece of news can be really extreme," he added. "So markets go through these periods of illiquidity, and it just presents these great opportunities that, by the way, may only be there for 10 minutes, or an hour, or a day. But I've never seen markets move to such extremes." Rieder shared a few of those opportunities he's leaning into at the moment in his iShares Flexible Income Active ETF (BINC), which yields 6.6% and has grown to $9 billion in assets since launching in May 2023. One of them is the front end of the yield curve, or short-duration Treasurys. Yields on the two-year note had dropped from 4.3% last year to 3.6% in April as investors started to price in as many as five rate cuts from the Federal Reserve. But as rate-cut expectations have fallen, yields have risen back up to nearly 4%, making them more attractive. Front-end bonds also offer a hedge for economic volatility in the short term, allowing investors to clip a robust coupon without being locked in for too long. The long end of the curve, meanwhile, isn't acting as a recession hedge, Rieder said, with investors worried about inflation from tariffs and rising yields thanks to ballooning fiscal spending deficits. "I'd rather keep yield up and not have to worry about the volatility," Rieder said. "The long end is not a hedge," he added. "Its traditional offsetting risk function doesn't work today, and so until yields move significantly higher, I don't see any significant reason to own longer in interest rates." Long-end rates in Europe, however, are more attractive, Rieder said. He said he's betting on European B- and BB-rated high-yield bonds to deliver higher yields. This is because economic growth is slowing to a greater degree in Europe than in the US, and inflation is tamer, so the European Central Bank is likely to cut rates more aggressively. This has meant limited upside volatility for European rates. For example, while 10-year Treasury yields have surged from 3.99% to 4.43% since April 4, 10-year eurozone bond yields have been virtually flat, falling by just 3 basis points from 3.13% to 3.1%. When yields rise, bonds lose their value, and vice versa. "Taking some of your interest-rate risk in Europe versus the US — particularly versus long US — has been an exciting thing to be involved with," Rieder said. "Usually, US and European rates move together," he added. "Now you're seeing historic movements of European rates relative to the US, meaning European rates are much more stable." Plus, the dollar's weakness relative to the euro is icing on the cake. "Because of the cross-currency swap, you could buy Europe and you get a couple of percent of additional yield," Rieder said. To mitigate the downside risk of some of the higher-yield bonds in his portfolio, Rieder pairs them with high-quality assets like AAA collateralized loan obligations, he said. Read the original article on Business Insider Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Insider
28-05-2025
- Business
- Business Insider
2 trades BlackRock bond chief Rick Rieder told us he's making to help generate almost 7% yield
It's been a particularly busy start to the year for BlackRock's bond chief, Rick Rieder — not that someone overseeing $3 trillion in assets has all that much spare time to begin with. The economic policy uncertainty that President Donald Trump has introduced has sent the bond market flailing in a way Rieder hasn't seen before. But the volatility isn't necessarily a bad thing. "There is change afoot. One of the great things about investing in this environment is it's not static," Rieder told Business Insider. "The reaction function to any piece of news can be really extreme," he added. "So markets go through these periods of illiquidity, and it just presents these great opportunities that, by the way, may only be there for 10 minutes, or an hour, or a day. But I've never seen markets move to such extremes." Rieder shared a few of those opportunities he's leaning into at the moment in his iShares Flexible Income Active ETF (BINC), which yields 6.6% and has grown to $9 billion in assets since launching in May 2023. One of them is the front end of the yield curve, or short-duration Treasurys. Yields on the two-year note had dropped from 4.3% last year to 3.6% in April as investors started to price in as many as five rate cuts from the Federal Reserve. But as rate-cut expectations have fallen, yields have risen back up to nearly 4%, making them more attractive. Front-end bonds also offer a hedge for economic volatility in the short term, allowing investors to clip a robust coupon without being locked in for too long. The long end of the curve, meanwhile, isn't acting as a recession hedge, Rieder said, with investors worried about inflation from tariffs and rising yields thanks to ballooning fiscal spending deficits. "I'd rather keep yield up and not have to worry about the volatility," Rieder said. "The long end is not a hedge," he added. "Its traditional offsetting risk function doesn't work today, and so until yields move significantly higher, I don't see any significant reason to own longer in interest rates." Long-end rates in Europe, however, are more attractive, Rieder said. He said he's betting on European B- and BB-rated high-yield bonds to deliver higher yields. This is because economic growth is slowing to a greater degree in Europe than in the US, and inflation is tamer, so the European Central Bank is likely to cut rates more aggressively. This has meant limited upside volatility for European rates. For example, while 10-year Treasury yields have surged from 3.99% to 4.43% since April 4, 10-year eurozone bond yields have been virtually flat, falling by just 3 basis points from 3.13% to 3.1%. When yields rise, bonds lose their value, and vice versa. "Taking some of your interest-rate risk in Europe versus the US — particularly versus long US — has been an exciting thing to be involved with," Rieder said. "Usually, US and European rates move together," he added. "Now you're seeing historic movements of European rates relative to the US, meaning European rates are much more stable." Plus, the dollar's weakness relative to the euro is icing on the cake. "Because of the cross-currency swap, you could buy Europe and you get a couple of percent of additional yield," Rieder said. To mitigate the downside risk of some of the higher-yield bonds in his portfolio, Rieder pairs them with high-quality assets like AAA collateralized loan obligations, he said.
