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SAO PAULO – BlackRock, the world’s largest administrator, with an administration of approximately $ 6 trillion in assets, predicts a 33% drop in United States GDP in the second quarter of 2020.
And the drop should trigger a short-term disinflation process, predicts Rick Rieder, global fixed-income CIO at BlackRock. “In such an environment, with interest at such low levels for an extended period, finding consistent returns for investors will be one of the main challenges for managers,” he said, during a live presentation by XP on Thursday night. .
In this new context, the class known as stressed assets (or troubled debt, in English), made up of debts of companies with financial difficulties, is, in Rieder’s opinion, one of the best opportunities available to investors in the short and medium term.
“A lot of corporate debt restructuring processes are taking place,” said the manager, adding that the stimulus from the Federal Reserve (United States central bank) to buy bonds in the market is making assets better quality converge to near zero performance.
“Stressed assets are a good opportunity for both investors and companies that need financing, and we have been looking to increase our operations in this segment,” said Rieder. According to him, emerging markets can be attractive for portfolios troubled debt from the manager in the coming months. “It will take longer than people forecast to return to the pre-crisis level.”
Sector> Rating
Among the more traditional private fixed-income options, BlackRock’s CIO said it is paying less attention to the rating level of newspapers at this time, and more to the sectors in which the broadcasters are inserted.
“Business’high grade“(Higher rating) from airlines or energy companies and retailers may have more difficulties,” said the CIO. “We are focusing more on assets‘high performance’ [com classificação mais baixa] sectors like health and technology. “
Despite emphasizing the importance of maintaining a cautious stance in the face of uncertainties, prudent cash management, Rieder considered that the investor should not be completely absent from the market.
“The S&P 500 has increased approximately 28% since March 23,” he said. “In other words, the investor who withdrew the funds missed a two-week recovery with a return that is generally obtained in a few years.”
Local opportunities and risks.
Regarding Brazil, the manager said he saw “significant” opportunities in fixed income after the stimulus measures announced in recent weeks and also due to the implementation of a liberal agenda from the Temer administration.
“We were impressed with the approval of the reforms last year, although we are a little disappointed with the pace of recovery in the region,” said the expert, who predicts a drop in Brazilian GDP of around 4% this year.
However, the high volatility of the exchange rate has contributed to keeping BlackRock’s handbrake on investment in the country. “We expect some monetary stabilization from now on,” said Rieder, who recognized the complexity of making forecasts for the exchange rate given the number of variables that influence currencies.
Side effects of “quantitative easing“
After the sharp drop in US GDP in the second quarter, BlackRock believes that fiscal and monetary stimulus to unprecedented levels should lead the economy to a “V” recovery, with growth of close to 10% in the coming quarters.
“The loss of income due to the crisis should be around US $ 700 billion. However, the US government stimulus should total $ 2 trillion, giving us comfort to make investments in the market now, “said the CIO.
In fact, the measures taken by the Fed are already beginning to take effect, Rieder said, noting that the wave of withdrawals from liquidity-seeking investors is slowing, with the start of the return of money to the market.
Rieder also said that the state injection of liquidity tends to generate inflationary pressure in the coming years, despite the fact that the short-term signal is disinflationary. “We shouldn’t expect double-digit inflation, but it will be higher than what we have today.” In the year, until March, US inflation increases 1.5%.
To hedge against inflationary risk, the funds managed by Rieder, which manages around $ 2.3 trillion in BlackRock’s fixed income strategies, have taken positions to hedge against inflation. An exposure to gold of 5% has also been maintained in the portfolio as a form of hedging against a scenario of loss in purchase value.
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