Final hours! Save up to 55% OFF InvestingProCLAIM SALE

BlackRock downgrades IG credit to neutral, ups exposure to high-yield bonds

Published 09/08/2020, 06:22 AM
Updated 09/08/2020, 07:30 AM
© Reuters. FILE PHOTO: A sign for BlackRock Inc hangs above its building in New York
BLK
-

By Repeats to add Reuters Instrument Code

LONDON (Reuters) - The BlackRock Investment Institute said on Tuesday it downgraded investment grade debt to neutral, citing little room for spread compression given that deeper rate cuts and more asset purchases are an unlikely policy response.

However, BlackRock (N:BLK) raised its "overweight" on high-yield bonds.

"We see the very high implied default rates as overly pessimistic, and high yield remains an attractive source of income in a yield-starved world," BlackRock wrote in its note to clients.

© Reuters. FILE PHOTO: A sign for BlackRock Inc hangs above its building in New York

BlackRock also downgraded emerging market local currency debt to underweight, saying many countries had limited policy space to cushion the pandemic shock and insufficient capacity to rein in virus spread.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.