BlackRock Recommends Buying Volatility While Pimco Sells

BlackRock Inc., the world’s biggest asset manager, is recommending that investors shield against a pick-up in volatility, putting it at odds with Bill Gross’s Pacific Investment Management Co.

BlackRock’s Chief Investment Strategist Russ Koesterich said that with the Chicago Board Options Exchange Volatility Index within a few points of its record low this month and with valuations “stretched across markets,” price swings are likely to return. Depending on the portfolio, one way to express that is to buy puts, derivative contracts that bet on a decline in the underlying security, he said.