BlackRock Strategists Cool on Credit After Firm Stoked Rally
- Research arm of firm closes overweight it’s had since April
- Robeco and Unigestion also turn away from corporate debt
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The Federal Reserve famously tapped BlackRock Inc. to help engineer a recovery in corporate bonds from the depths of the corona crisis. Now, strategists at the firm say the rally in investment-grade credit looks exhausted.
BlackRock Inc.’s research arm just downgraded the asset class to neutral from overweight on frothy valuations and rising interest-rate risk. With premiums over government bonds almost back to pre-crisis levels, BlackRock Investment Institute’s chief fixed-income strategist sees little upside while a new fiscal package remains stalled and a contentious U.S. election looms.