BlackRock’s Rick Rieder Learned the Value of Moderation From 1980s Bond Blowup

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Blackrock’s fixed-income chief is adjusting his asset positions to account for inflation and interest-rate risks, and spreading his bets widely

Mr. Rieder’s position is supported by benchmark bond yields, which continue to suggest a rapid return to slow, steady growth. The yield on the 10-year Treasury note, which tends to rise when investors expect a surge in growth and inflation, settled at its highest level in more than a month after data Wednesday showed a bigger-than-expected climb in consumer prices. It remains below its yearly high of 1.749% hit at the end of March.

“There isn’t an investor out there who doesn’t want to know what he’s thinking,” says Marc Badrichani, global head of sales and research at JPMorgan Chase & Co. “With an expansive view of global markets, he has a unique ability to spot emerging trends and incorporate them into long-term investment strategies.”

An early trade provided a lifelong lesson. Mr. Rieder bought a chunk of Canadian bonds issued by a utility company, Hydro-Québec. He still remembers the coupon and maturity—details on a bond that affect its value. Mr. Rieder says he prefers to ‘make a little bit of money a lot of times,’ rather than become too reliant on one trading area.

Morningstar analyst Claire Butz says the ratings company upgraded the Global Allocation Fund in May because of Mr. Rieder’s leadership and ability to combine big-picture views with extensive research. She says his takeover was “a welcome change from the previous manager’s more siloed approach.”. The firm posted record inflows, with $61 billion pouring in to fixed-income investments in the first quarter of 2021. Across all strategies, BlackRock took in $171.

Mr. Rieder expects growth to surge and the dollar to remain stronger than many analysts and investors currently predict. Inflation could be “shocked higher over the next few months,” Mr. Rieder says, but he expects it to remain contained in the long term by trends that include an aging population.

 

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