YouSaid · the spoken record

Rick Rieder

lines on the record: 119
first: 2023-02-10
most recent: 2023-02-10
sittings or episodes: 1
sources: podcast

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“So I think, you know, it's interesting how every committee, like the Fed, et cetera, there's always this, I can tweak it a little bit. And I think at this point, it's time the system recalibrates. I mean, the number of times that the Fed has to come to the fore when you have a financial crisis, when you have a pandemic. And then I think you got to go get to the back page of the newspaper versus the front and let the system do what it's going to do because the more that you create the news, if you think about if you're a big CEO, CFO, and I'm thinking about CapEx and long-term hiring plans, do I need to have the Fed as one of the risk factors in? I don't think so. And I don't think we need to keep the economy will do its job of keeping the system on pace. And you think about what we just have in the last couple of years, like you said, goods economy to service economy, the number of people job shifts, extraordinary of how it played out.”
2023-02-10 · Masters in Business · Rick Rieder on Fixed Income Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“Second biggest And all of a sudden, what thought would look like inflation would start to moderate or at least stabilize, we took a whole nother leg higher. And then, like you say, in September, October, we started getting these point core CPI was printing at 0.6 for two straight months. So annualizing, that's over 7%. And then all of a sudden, like, oh my God, this Fed may have to go significantly further. And by the way, at the same time, employment was extraordinarily strong. And it is today. And I still think people don't recognize there's not enough people for the jobs today. There's still a deficit in all those sectors we talked about earlier.”
2023-02-10 · Masters in Business · Rick Rieder on Fixed Income Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“And I And then So it was pretty wild. I mean, so you think about, by the way, when you think about 2022 and part of the Fed deserves some blame for taking too long, but you also had a war that was who thought you'd shock fuel prices and who food prices? I mean, what is it? Russian-Ukraine account for 12% of the calories in the world. Right.”
2023-02-10 · Masters in Business · Rick Rieder on Fixed Income Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“Looks fantastic. Totally. So, what is it doing? It actually prices your forward curve in a bit because people say, you know what, I'm willing to take that. By the way, the risk is that all of a sudden you have some shock to the system economy does slow. Maybe they do move. But people are willing to say, gosh, I'll underwrite that easing that's probably not priced right because I need to lock these yields in. And by the way, I spent much the last year sitting on my hands and trying to protect my downside. Now these bonds are attractive. So I think it is a technical condition that's driven the market to price in that ease today.”
2023-02-10 · Masters in Business · Rick Rieder on Fixed Income Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“Much of that money is not necessarily looking at what is the one year, one year forward, the two-year, two-year forward. They're saying, I can lock in four and a half. I can lock in. So what's happening is people are sitting on immense amounts of cash.”
2023-02-10 · Masters in Business · Rick Rieder on Fixed Income Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“So it's a fascinating dynamic that's playing into markets today. So, I don't think most of the people, economists, people that follow the fad that listen to what the Fed's saying, I don't think anybody believes the Fed's going to cut rates in 2023. Oh, really? When the Fed says we're not, I mean, and all the Fed presidents, governors come out and say we're not, then I think you have to take them at their word. Why is the market doing this? You know, I've learned in my career that the technicals are as important, if not more important, than the fundamentals. What's happening now, that the discussion we had before about money flowing in, because people are locking in these yields.”
2023-02-10 · Masters in Business · Rick Rieder on Fixed Income Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“Or am I wildly off with that? It's funny you say that because listen, I think we've gotten to the place where there actually is too much communication. A lot, right? You know, you have the SCP, the Dots. Now you have the press conferences. Now you have one of the real tools of monetary policy is to be able to react and be adaptive to the economy as it is.”
2023-02-10 · Masters in Business · Rick Rieder on Fixed Income Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“Historically, isn't that true? Yeah, but I think the reason why they were too late is because you had, I mean, think about vaccine happened. And all of a sudden, you change the economic paradigm so darn fast. And, you know, one of the things that's hugely important for the Fed is credibility. They laid out a path that they were going to keep interest rates low and QE in place for an extended period of time. And then it was hard to change that. Anyway, it was the wrong. That's an argument.”
2023-02-10 · Masters in Business · Rick Rieder on Fixed Income Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“So I think the one, I mean, I think the one mistake that the Fed made is that, like you said, they were too late. And I think they could have been. But they're”
2023-02-10 · Masters in Business · Rick Rieder on Fixed Income Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“Totally. So, think about what, you know, the reason why I think the Fed should pause is let this play out if net disposable income for lower income, lower wage earners stays higher with a consumption basket as food, energy rent, it's not a bad thing that that inflation is a bit higher as long as wages for lower income are higher. So I think that system is recalibrating, economy is recalibrating, it will recalibrate, and I don't think the Fed should overdo it to take two to three million people out of work or more than that, and particularly those will be lower wage jobs to take that. I don't think it makes any sense.”
2023-02-10 · Masters in Business · Rick Rieder on Fixed Income Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“The Fed has got to be careful about not going too far. And the one thing that I'm really, really sensitive to, there's something really powerful that's happened. All the jobs being created today are the lower wage jobs in this country. All of the ones we talk about, healthcare, education, leisure, hospitality, hotel, et cetera. Now you're closing the income gap. It took 20 years to close the income gap. You know, you're getting capital going to labor. That is hugely powerful. The layoffs are happening in finance technology, the higher income jobs.”
2023-02-10 · Masters in Business · Rick Rieder on Fixed Income Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“My view is the Fed has gotten to a level that is restrictive, and now the question is, when you have an economy like this, do you bludgeon the interest rate sensitive parts of the economy, real estate, the automobile market, parts of how you finance big durable goods? Do you bludgeon that to try and help the overall bring inflation down? My sense is the Fed's gone far enough, doesn't need to overtighten. And if it does, it will create exogenous shock, you know, the leverage in the system builds. You see it in places, particularly real estate today.”
2023-02-10 · Masters in Business · Rick Rieder on Fixed Income Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“The US economy is very different than it was in the 80s, 90s. We are now two-thirds of the economy consumption is a service economy. We never had that. It used to be a goods-oriented economy. When you moved interest rates, the economy recalibrated quickly because the goods-oriented economy, interest-sensitive, cyclically oriented. Think about healthcare, think about the jobs market today. All the jobs are being created, healthcare, education, not hugely cyclical, not interest rate sensitive. And obviously leisure hospitality where there is some cyclicality to it.”
2023-02-10 · Masters in Business · Rick Rieder on Fixed Income Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“The average list. Yeah, I agree with that guy. He seems to know what he's talking about. I'm not sure of that. Anyway, so the one thing that I think is real.”
2023-02-10 · Masters in Business · Rick Rieder on Fixed Income Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“Going to two, two and a half. That's what we're playing for this year just sort of ride a central bank that is going to pause. And by the way, it may still move right up a little bit more than we are today, but can you ride through it with, you know, it's not going to be like last year. So it's a good market for fixed income. And then I think it'll get to a better market.”
2023-02-10 · Masters in Business · Rick Rieder on Fixed Income Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“Following that, right? Now, and by the way, COVID accelerated this. You've had a fertility issue. And think about Japan, China going through a demographic difficult period. U.S. is a slower period. So what happens is growth follows a demographic curve. Does it come off it when you have a shock, a pandemic, a financial crisis, huge stimulus goes in? I think we're going back to a low twos percent tenure because I think GDP will operate at one and a half to two. By the way, lower in Europe, lower in Japan than that. So I think rates are going back. So is the bull market in bonds as a secular move from the 80s, 90s over 100%. But I think if you said to me, Puerto Rico, why you've seen this huge move of people, I want to lock these rates in, four and a half is nirvana. You know, if you don't have to take a lot of interest rates, if I can get five, I can get six. We talked about, you know, my strategic income fund. I'm trying to keep a steady six in that portfolio. Boy, if I can get six.”
2023-02-10 · Masters in Business · Rick Rieder on Fixed Income Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“And I think people underestimate US economy is the most adaptive, reflexive, and it will adjust. And you're seeing it in the interest rate parts of the economy, like housing, like automobiles, et cetera. So listen, I think we're going to see a rally in interest rates probably in 2024 and 25. Because I think rates will go back. The 10-year treasury will go back to two and a half percent. Oh, really? Yeah, and because you think about what is potential growth in the US and the world, growth follows the demographic curve incredibly closely. And you think about the world we live in, that's different than the 80s, you know, when you had explosive baby boomer, you know, that was starting to enter the workforce, et cetera. Eco boom.”
2023-02-10 · Masters in Business · Rick Rieder on Fixed Income Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“So, I mean, it certainly didn't work last year. So I think we are, I was looking at it at how the rates market, the Fed funds rate, looks like a mountain range over time. It spikes higher and then it come to come down the other side economy, slows, then you come down the other side. And then a couple years goes by, you start to move up again, and then you come down the other side. I don't think we're coming down the other side today. So I don't think usually when rates move up this much, economy slows and we're coming. I think this is going to be, we're going to stay on the top of the mountain range for a while. And I think the Fed is going to let this restricted policy percolate through the system.”
2023-02-10 · Masters in Business · Rick Rieder on Fixed Income Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“Right, to Any now. So now, so how do you do that effectively? And I've never been able to do it effectively. I always want to here's my hypothesis, here's my ultimate thesis around what we're doing with it. But you can do it if as long as you can get a few thoughts out there and then maybe people look deeper into what you're thinking, it can be a really effective mechanism. So here's my conclusion, and it's different because usually you build up the conclusion there. I tend to find, here's my conclusion, and maybe I can give you a couple of snippets to how to do it. But it's a super effective mechanism to get out there. And so I read a lot on Twitter. I find it's because you say it's instantaneous opinion. The new tape. I think so. So, I mean, I spent a lot of time. So it's been effective to be out there with it.”
2023-02-10 · Masters in Business · Rick Rieder on Fixed Income Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“It is real time I So, my biggest reservation is, you know, I think the world, it's pretty hard to think about, you know, what are you doing with duration? Oh, here's 140 character, whatever the number of characters is.”
2023-02-10 · Masters in Business · Rick Rieder on Fixed Income Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“But you know, I've learned in my career that you got to take a step back and think about, you know, instead of following dollar yen every second, you got to think about why is Dollar Yen doing it, try and assimilate it all into a cogent set of thoughts. So I need a weekend to do it. My wife hates it. But it's not the most socially ingratiating weekend of my life. But I have to do it. And I go through and I put it all together. I use immense amounts of data and analysis. I stare at graphs, tables. And then all of a sudden you get these aha moments. Literally, you know, I could sit there for six hours. I'm like, now I get it. Now I get why high yield trades here in Europe and it doesn't in the US and what cross currency basis is, et cetera, takes a while to assimilate it all. The reason why Twitter, and maybe I'm not the perfect specimen for Twitter is, you know, my tweets tend to be have five or six long thread to them with graphs, and it's not a perfect, you know, in a world they want. No, they're very useful.”
2023-02-10 · Masters in Business · Rick Rieder on Fixed Income Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, first of all, anything I tweak goes through legal incompliance before it gets out there to the first part, second part. So I use an incredible amount, I do these monthly calls, I do these write-ups, I use immense amount of data and analysis. And when I do my monthly calls, I literally lock myself literally in a room for one weekend a month. It's brutal.”
2023-02-10 · Masters in Business · Rick Rieder on Fixed Income Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“Should get you the 40 and get you the fixed income, you know, try and outperform the ag every year, but closer to the ag. And then our strategic global fund allows us to use the international markets more aggressively.”
2023-02-10 · Masters in Business · Rick Rieder on Fixed Income Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so traditionally would be 60, 40 equity debt, but with an eye towards, you can be international, you can be domestic last few years, we've run global allocation much more with the U.S. bent. You think about the incredible growth of U.S. technology, that was something to ride for a while. Now we're shifting it more international places like China, Europe, et cetera, that are really growing. And that valuations are cheaper. So the neat thing about that fund, A, we could toggle from equity to debt. We could use a little bit of illiquidity around some privates. You know, now we're doing something in Global Al that it's hard to do another funds, building up our carrying income. You could use that, use fixed income to get there, use quality. But then take some risk in equities to try and beat the index for global allocation. And then the other funds don't take too long on them, but total return gives you more of that if you were building a 60, 40 portfolio.”
2023-02-10 · Masters in Business · Rick Rieder on Fixed Income Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“Our global allocation fund is more of an unconstrained but more with an equity tilt. And that's been super fun to run that.”
2023-02-10 · Masters in Business · Rick Rieder on Fixed Income Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“13%. Yeah, that's a big. Yeah, and so being able to recognize that use some hedges, run a lot of cash, and then stay in the short end of the yield curve. And then today, it's a little different. So the ability to be flexible and tactical. Is unbelievable in fixed income. And I think much of the future of fixed income is can you marry to, you think about the growth of iShares and passive, can you marry an opportunistic tactical portfolio that, by the way, lets us invest around the world when things like emerging markets become a trend? So anyway, SIO has grown quite a bit over the years and has been honored to have a number of awards to it. But I think it's just creating consistent returns. So quite frankly, people can get yield and then focus on the other areas where they take risk, equities, et cetera, private equity, venture”
2023-02-10 · Masters in Business · Rick Rieder on Fixed Income Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, we did. We didn't make money last year. We were down, but we beat the aggregate index by, I think, $750 basis points. You know, years like that, if you recognize the regime and you lose less.”
2023-02-10 · Masters in Business · Rick Rieder on Fixed Income Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“I can hedge. I can hedge my portfolio freely. Like last year, you can use the dollar. I can use, I can get short in some areas. So unconstrained, what we're trying to do is create consistent return over time. Regardless.”
2023-02-10 · Masters in Business · Rick Rieder on Fixed Income Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, you know, I'm a bit honored to run some pretty great funds. I mean, our strategic income opportunities is a flexible, unconstrained fund. So unconstrained, you know, when you think about fixed income, when you say they're unconstrained, it sounds like you're hanging from the chandeliers taking risk. Unconstrained means I could take less risk because the point you made earlier about, gosh, I don't have to be tethered to an index.”
2023-02-10 · Masters in Business · Rick Rieder on Fixed Income Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“More or less on the mortgage side Yeah, I mean, now you can buy assets that are like mortgages, but first of all, they're extremely liquid. And so whenever we build a portfolio, we think about every security has a tail to it”
2023-02-10 · Masters in Business · Rick Rieder on Fixed Income Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“Interest rate volatility comes down, things like agency mortgages fit a portfolio that gets you a little bit longer on the yield curve.”
2023-02-10 · Masters in Business · Rick Rieder on Fixed Income Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, but I was still in college, so I wasn't. But by now, I mean, this massive move, and now what's going to happen is we're going to pause, interest rate volatility can come down, things like mortgages. We didn't own many mortgages last year as in our tactical portfolios. You know, why would you own negative interest rate shock, negative connection? So now Fed coming into a pause”
2023-02-10 · Masters in Business · Rick Rieder on Fixed Income Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“Three, four, five? Correct. I mean, that's been to me, that's the sweet spot. And the biggest, I think the biggest opportunity today is sell interest rate volatility. You think about, in my career, I've never seen this before. We had a Fed that moved 475 basis point moves in a row. Interest rate volatility was massive. 81.”
2023-02-10 · Masters in Business · Rick Rieder on Fixed Income Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“Our aspiration is gosh, these yield the one to three year part of the ag, the short end of the yield curve, gets you four and a half percent. The average for the last 10 years was 1.4. We can now lock in four and a half and maybe the economy is coming off, the central bank not in 23, but we'll start to ease. And now there's a discussion about, gosh, maybe I can lock these yields in for longer. And so maybe I'll take a little bit of downside and push my maturities a bit further on the yield curve. When you say out.”
2023-02-10 · Masters in Business · Rick Rieder on Fixed Income Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“Going to have to start raising your price returns, going to be negative. Stay as short as possible, hold as much cash as possible. And by the way, zero was a pretty good answer for your return in 2022. So if we were getting zero or getting our income at the short end of the yield curve, that was nirvana because we weren't taking such interest rate risk. Today it's a little bit different because now we're approaching the end of By the way, it's not definitive, but we're probably approaching a point where the Fed's going to pause. Europe's still got a bit more to go. So now we can take a little bit more risk, you know, push it a bit further out the yield curve because now...”
2023-02-10 · Masters in Business · Rick Rieder on Fixed Income Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“But literally earning points. Well, but as a year ago, anyway. Right. Right. But then, you know, the front end of the yield curve started to move up. And it became pretty clear all the central banks in the developed markets were behind the curve.”
2023-02-10 · Masters in Business · Rick Rieder on Fixed Income Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“So, you know, think about last year. I mean, I know every media event or anything we did externally, I talked about how much, and it was always people said, how much cash are you running? And we were running a lot of cash. In my career, I've never mean.”
2023-02-10 · Masters in Business · Rick Rieder on Fixed Income Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“Fuel prices are lower, the economy's stabilizing, China's growing. We're shifting money internationally. So every year, it's part of why the business is so fun, is every year, every month, every week. You know, the menu changes and the opportunity set changes.”
2023-02-10 · Masters in Business · Rick Rieder on Fixed Income Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“Functionally 90, 85 to 90% of return investment grade, I can sleep a whole lot better at night. And then maybe I take some risk in emerging markets and what have you. So it's all about relative value. Are you getting paid for the risk today? So think about where's the stress in fixed income, commercial real estate is tricky today. Do I want to go and get that yield today? Probably not. Whereas, you know, parts of credit card, auto finance are more attractive. So it is constantly trying to think about where do you want to be in the capital stack? Where do you want to be in sector? Where do you want to be in the world? Like last year, did you want to hang out in Europe? Probably not. This year?”
2023-02-10 · Masters in Business · Rick Rieder on Fixed Income Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“Totally. At the end of the day, there are so many metrics debt divid, your interest coverage, there are so many metrics that we dig in, what industry are you in, what's your liquidity, you got to really dig in. I mean, if you're a AA rated company, I generally don't do a lot of thorough analysis, but if it's single B, I'm doing, we're doing an awful lot of work. So when we look across fixed income, and the beauty of having big teams around the world, I tend to say, okay, I want to be an X amount mortgages, I want to be X amount credit, and then let the teams dig in and then think about, I'll give you a good example today, the high yield market has people need the yield or looking for the yield, the high yield market is compressed to the investor grade market. I don't want to take the beta risk in a lot of high yield today. If I get...”
2023-02-10 · Masters in Business · Rick Rieder on Fixed Income Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“Know it's funny because today is an interesting, you don't see this very often, but much of the double bee high yield market is better quality than the triple B investment grade market, and that is because companies have been operating as double B's for a long time, a number of them are moving up to investment grade or are aspired to move up to investment grade, where a number of companies in AIBB that are at the lowest end of investment grade and maybe on the deceleration. That's an odd.”
2023-02-10 · Masters in Business · Rick Rieder on Fixed Income Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“Let alone how much duration you're taking, how much interest, how much credit you're taking, illiquidity, et cetera, there are so many tools to try and outperform. And listen, one of the secrets of fixed income is you generally try and carry more than the index. You generally want your income in a fund to be above the index. Can you manage that through downturns? And so when you get a downturn like 22 or 08 or what have you, it is, you know, can you manage the downside? Because it's generally, if you can get more yield in the benchmark, you're going to outperform over time. And so managing that risk and making sure, by the way, you know, there are crises at individual companies, there is exogenous shock that hits, but managing that downside so that one expression doesn't hurt you. You can run a good business that outperforms almost every year.”
2023-02-10 · Masters in Business · Rick Rieder on Fixed Income Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, that's my pitch. So it's funny to say that. Yeah, no, first of all, that is exactly right. I mean, maybe I'll start with one thing in equities. There are, I think the number is in there, 4,800 equities, different securities globally. I think there's 45,000 in fixed income. So your point about the ability to. Right. And the ability to say, gosh, you know, there's a lot of stuff in fixed income that for a variety of reasons central bank owns it, a pension fund owns it, insurance companies own it, it has no value. But it's been in a portfolio for a long time. It's stuck there. So one of the beauties of fixed income is, A, finding one of the 40x,000 securities using your tools, by the way, at times using your liquidity, being able to buy mez, you know, buying subordinated debt, buying what are functionally capital notes. But there are so many tools at your disposal.”
2023-02-10 · Masters in Business · Rick Rieder on Fixed Income Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“Larry Fink and Rob Capito. It's our CEO and president. But then over the years, through an acquisition of the merger with Merrill Lynch Investment Management, all of a sudden became a big equity house. And to this day, where equities are bigger than fixed income today, and some of that is equities appreciate over time and compounded return works in the equity market. But now our equity business is larger than our fixed income while both are pretty good scale. I mean, in fact, one of the businesses I run, our global allocation fund, that is more of an equity fund. You know, again, with a bit of different, the way you run that, different than you run a bond fund.”
2023-02-10 · Masters in Business · Rick Rieder on Fixed Income Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“It is. I mean, it started largely mortgages, fixed income bond shop, and created closed-end funds, but it's very much, I mean, Larry and Rob and the management team's origin was in fixed income.”
2023-02-10 · Masters in Business · Rick Rieder on Fixed Income Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“It will not return on calories. And so along the way, are you clipping enough coupon to get there equities you're trying to get convexity to the upside? But to have risk system and a process, a repeatable process, particularly in my business, I go on fixed income. I say it in my funds. A lot of my funds make a little bit of money a lot of times. And as opposed to, let's swing for the fences. Let's just do it. Use relative value, use all your tools, use your tools around the world, do it over and over and over again. And I think that model is repeatable. And people aren't shocked to the downside, which I think particularly fixed income is the key.”
2023-02-10 · Masters in Business · Rick Rieder on Fixed Income Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“100%. I mean, 100%. And, you know, when clients invest with you or rating agencies or consultants evaluate your business, it's all about what is your process? Is it repeatable? And are you not going to embarrass them or cost them or cost them money? And we built a franchise around thoughtful investing. We don't swing for the fences on one investment theme. It's always try and build diversification, try and do it thoughtfully, and try and be consistent return without creating real pressure on the downside. And I think that's particularly fixed income. It's not the equity market. And I run some big equity portfolios different. Fixed income is convex to the downside. You either get par, either pay you back or they don't. It's return.”
2023-02-10 · Masters in Business · Rick Rieder on Fixed Income Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“A unique benefit to the firm, and I think that's part of how we've grown so much if you can make good, you know, hopefully more good calls than not, but you know exactly how they're going to interplay within a portfolio, hugely powerful.”
2023-02-10 · Masters in Business · Rick Rieder on Fixed Income Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“Shelf piece of software totally, which is run by many insurance companies, pension funds who use Alatin, and it's a commercial enterprise for the firm. But I remember when I came to BlackRock and I got to you, and I knew about Aladdin when Cred Franklin was on the sell side because remember Lehman had the Lehman Ag. And that was the benchmark. But what happened? Aladdin was able to take it and bring it alive in terms of how do you manage money. And it's really been extraordinary around if you can analyze your risk, you can think about optimizing your return, you could build, how do you look at correlations, diversification? And I remember I was like a kid in a candy store when I first started and I said, wow, this is powerful. I mean, and I say this to clients all the time, we could make the wrong decision on markets, but it's never that we don't know what we own or what that decision, the implications of that decision given our risk system. And that's been.”
2023-02-10 · Masters in Business · Rick Rieder on Fixed Income Investments · IDENTIFIED FROM THE TRANSCRIPT · source
“No. No, I mean, at the time, I remember when I came over and then soon thereafter, the firm bought BGI in the iShares business. But gosh, the thought that growing to the scale that we've grown into never would have even been a consideration. Yeah, I will say Larry and Rob and the whole operating committee and the executive committee of the firm are very thoughtful about where opportunities are and they've built the business piece by piece over the years. And I think there's something that's really important about we run our franchise around A, what is the client looking for, but B, the risk system. So the Aladdin risk system is when I remember when I came over, which is unique.”
2023-02-10 · Masters in Business · Rick Rieder on Fixed Income Investments · IDENTIFIED FROM THE TRANSCRIPT · source