BlackRock’s Rieder Shorts German Bunds as Yields Still Too Low

Rick Rieder, chief investment officer of fixed income and fundamental portfolios at BlackRock Inc., said his firm is betting against longer-dated German debt.

“Bunds were crazy high before and they’re still too high today,” Rieder said in a Bloomberg Television interview.

European sovereign debt has tumbled in recent weeks as signs of inflation picked up. Bill Gross said in a Twitter message on April 21 that 10-year German bunds were the “short of a lifetime.” Alan Howard, billionaire co-founder of Brevan Howard Asset Management, warned days later that it was “crazy” to hold debt with negative rates.

Rieder said his firm, the world’s largest money manager, is moderately short the German debt and “didn’t make a lot of money” when prices fell.

BlackRock manages $4.8 trillion of assets globally. The $6.3 billion BlackRock Total Return Fund, which Rieder oversees, has lost 1.25 percent in the past month, according to data compiled by Bloomberg. It’s up 4.7 percent over the past year, beating 98 percent of peers.

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