BlackRock Inc.’s Laurence D. Fink, chief executive officer of the world’s largest asset manager, said he’s a “big buyer” of the U.S. dollar, which rival Bill Gross has urged investors to avoid.
Fink, 58, doesn’t see a “bear market” in bonds and would buy U.S. Treasuries if yields rise above 4 percent, he said today in an interview from New York with Bloomberg Television’s Erik Schatzker. Gross, manager of the world’s largest mutual fund, has said the best days for bonds are over. He has cut holdings in U.S. government debt to the smallest level in two years, while boosting non-dollar securities.
“We believe rates will creep up,” Fink said. Still, with inflation likely to be muted, “we’re not calling that a bear market.”
BlackRock and Gross’s Pacific Investment Management Co. are the two biggest bond-management firms, and both have advised the U.S. government. Fink’s views have diverged from Pimco’s before. In January, he told investors that he never believed in a “new normal” for the U.S. economy, a term coined by Pimco for its forecast of a prolonged phase of below-average economic growth and a diminished role of the U.S. in the world following the financial crisis.
Unlike Gross, 66, who is the co-chief investment officer of Newport Beach, California-based Pimco, Fink doesn’t manage any BlackRock funds.
“I’m a big buyer of the U.S. dollar,” as the sovereign- debt crisis in Europe will cause volatility in the region, Fink said in the interview.
With banks in the region needing more capital, and unrest in the Middle East causing oil prices to rise, Fink said he’s “more worried” today about equities than he was six months ago. Political turmoil, which started in Tunisia more than two months ago, has spread to countries including Oman, Bahrain and Libya.
“I think the market is pausing,” Fink said.
Saudi Arabia’s benchmark stock index has plunged 15 percent in the past week on investor concern that protests may extend to the Middle East’s biggest oil producer. Any disruptions in Saudi Arabia could cause the price of oil to reach $150 per barrel in the near term, Fink said.
“If there is uncertainty around Saudi Arabia that produces a slowdown of oil production, we will have severe issues in the world,” Fink said.
In the U.S., “inflation may be a problem in the short run, but in the long run not so,” he said.
BlackRock, co-founded by Fink in 1988, in 2009 acquired Barclays Global Investors to more than double its assets under management and add passive strategies such as exchange-traded funds. The firm manages $3.56 trillion in assets.
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