By Trevor Hunnicutt
NEW YORK (Reuters) - BlackRock Inc's (N:BLK) chief investment officer of global fixed income, Rick Rieder, said on Wednesday his team cut a February position they held shorting, or betting against, the U.S. dollar while betting on Japanese yen appreciation.
Now, he said, "we have reversed" and are now favoring the U.S. dollar.
Rieder said he does not believe U.S. stocks are undervalued "at all," underscoring that his remarks at a conference yesterday that stocks could "maybe" go up five percent to 10 percent this year were not a prediction and that such a rally would be surprising.
In fact, according to Rieder, the "upside in equities is much more limited" as corporate cash flow moderates and the cost of financing moves such as share buybacks has increased, ending what Rieder called "the greatest arbitrage in history."
The BlackRock Strategic Income Opportunities Fund
Rieder said his team has increased its portfolios' exposure to high-yield debt and emerging markets to boost yields as fixed-income markets are starved by low, and in some cases, negative rates.
New York-based BlackRock oversaw $4.6 trillion in assets globally as of Dec. 31, 2015, with a third of those held in fixed-income products.