BlackRock Shockingly Anticipates Jaw-Dropping Trillions Pouring Into Bond Funds – You Won’t Believe It!

One thing to start: One of the UK’s most successful fintech entrepreneurs Nick Hungerford died at the age of 43 from a rare form of bone cancer. Hungerford co-founder Nutmega digital asset management company, in 2011, and sold it to JPMorgan Chase for around £700 million a decade later. Hungerford had recently set up Elizabeth’s smile, a charity to support children who have been bereaved by a terminal illness, in tribute to their two-year-old daughter Elizabeth. Our thoughts are with her family and friends.

Black rockthe world’s largest wealth manager believes investors are ready to pour trillions of dollars into fixed-income funds.

While many investors bought money market products to take advantage of the rate hike, BlackRock’s chairman Rob Got it he expects much of this to turn into bonds.

“There are trillions . . . that they are ready, when people feel rates have peaked, to flood the market and we need to position ourselves to capture that,” Kapito said.

The New York-based group of funds reported higher-than-expected earnings on Friday and reported a jump in assets under management to $9.4 trillion.

The group reported net income of $1.4 billion in the second quarter, a 27% increase over the same period last year, supported by the recovery in the benchmark S&P 500 index.

“Most asset managers are shrinking and BlackRock has grown,” he said Kyle Sandersequity analyst at Edward Jones.

It said that while net inflows of $80 billion in the quarter fell short of expectations, they remained “healthy.” Sanders noted that this differentiates BlackRock from competitors, with many suffering net withdrawals in recent months.

T Rowe Pricefor example, last week it reported net outflows of $20 billion for the second quarter, even as assets under management soared to $1.4 trillion on the market rebound.

Still, Highway, another big player in the ETF market, reported strong net quarterly inflows of $38 billion into its investment management arm. However, the custodian bank’s shares fell after it was warned paying higher rates hold deposits.

BlackRock’s profit surge comes even as the asset manager has coped prolonged attacks by Republican politicians for what they claim is a “woke” approach to investing. BlackRock has attempted to deflect criticism by pointing out the breadth of its offerings, from index trackers to alternatives. “Clients want more from BlackRock, not less,” said the chief executive Larry Fink.

Recent cost-cutting efforts have also given the asset manager momentum: It returned to an adjusted operating margin of 42%, almost to the level of a year ago.

The fund’s chief executives are split over UK pension plans

While some asset managers praised the UK Chancellor’s Mansion House speech last week on harnessing the domestic financial services sector to galvanize the economy, others were more critical of the by Jeremy Hunt plans.

One of the initiatives involves nine of the UK’s largest pension institutions committing 5 percent of their defined-contribution funds default into unlisted shares by 2030. The government believes this deal could unlock up to £50bn of investment in high-growth companies by 2030 if all UK pension schemes follow suit. ‘example.

Some asset managers praised the move. Peter Harrisonmanaging director of Schröderstold the Financial Times: “We need to get to a position where we ensure that people save for the long term and take adequate risks, rather than the culture of consumer protection.”

“The big absurdity at the moment is the trade-off between low cost and decent results. The reason DC funds don’t put money into private markets is because they compete solely on price. . . We need to move away from cost to focus on value.”

Stephen Birdmanaging director of the FTSE 100 fund manager Abrdn, said: “The average Briton has an underfunded pension. . . In truth, unless you set goals and measure yourself against them, it’s not going to happen.

Others, however, were more skeptical about the initiative.

“We should have done this when interest rates were low, now you are entering a much more hostile macroeconomic environment,” he said Hendrik du Toitmanaging director of asset managers Ninety one. “The part they’ve lost in the push to make the UK a unicorn maker is encouraging the billionaires of this world to be here and to support the people here.”

Matthew Beesleymanaging director of Jupiter Wealth Managementagreed with the direction of travel but sounded a note of caution.

“As active managers, our job is to channel capital to parts of the market that we believe are priced inefficiently, sometimes it will include growth assets and private assets, sometimes it may not,” he said. “So having any kind of fixed allocation suggests putting another target on top of the [pension] focus of the fiduciaries, which are risk-adjusted returns.

Chart of the week

THE gap in government borrowing costs between emerging and developed markets fell to its lowest level since 2007 as investors weigh interest rate cuts in some emerging economies and further tightening in the West, he writes Mary McDougall.

The spread fell to less than 2.9 percentage points last week, the tightest in 16 years, according to data from Allianz Global Investors.

“Investors are recognizing the narrowing of the credibility gap among policy makers,” he said Riccardo house, chief investment officer for emerging market debt at Allianz Global Investors. “Emerging markets have done a good job of dealing with this inflationary shock and I’m not sure the same can be said of some of the western central banks.”

In Latin America and Eastern Europe, central banks reacted more quickly by raising rates in response to inflationary pressures after the easing of coronavirus restrictions.

by JPMorgan The widely followed benchmark of emerging market local currency government bonds has delivered a total return of 7.5% since the start of the year, supported by the Latin American sub-index, which is up 21%, and Central and Eastern Europe , which gained 11 percent.

At the other end of the scale, US government bonds have produced total returns of just 1.6% this year, while German bonds have returned 1.2%.

Investors are positioning themselves for further gains given the high real yields offered by emerging market debt, falling inflation and the prospect of rate cuts that should drive up bond prices.

“Local currency rates and bonds present a very attractive opportunity for the next six months and beyond,” he said Liam Spillanehead of emerging market debt a Aviva Investors.

Five must-see stories this week

Goldman Sachs Wealth Management has agreed to acquire Norwegian educational technology company Kahoot, marking the latest take-private deal in Europe. The cash offer gives the company a value of NKr17.2bn (£1.3bn).

Fund manager Nick Train has warned that UK stocks are ‘abysmally’ in disgrace with investors and could remain “frustratingly cheap for a long time”. Train, which is one of the UK’s best-known fund managers, managing £4.4 billion Lindsell Train UK Equity Fundsaid the UK market could be a “moribund value trap”. However, she said this offers opportunities to snap up “wonderful companies at the wrong price”.

Thousands of UK employers are expected to see ‘significant’ cuts in the insurance levy pay to the Company Pensions Bailout Scheme, as the body has crossed the threshold for the first time to become better-funded than the plans it protects. THE Pension Protection Fund the war booty rose to £12.1bn in March this year, up from £11.7bn in the previous financial year.

Speculative fund Associates Bridgewater warned the The US battle with inflation is far from overand who is betting on a rapid series of interest rate cuts by the Federal reserve next year they are premature. Over the next year, investors expect the central bank to reverse course, cutting borrowing costs sixfold to around 3.8% by November 2024.

The UK and the EU are withdrawing one of their highs high-profile financial regulations in a bid to revitalize the region’s capital markets, but investors and brokers warn the move may come too late. UK Chancellor Jeremy Hunt he said he would back off Mifide II regulations, which prohibit stockbrokers from covering the costs of investment research with the commissions clients pay for trading.

And finally

THE British Museum hosts an exhibition focused on the relationship between luxury and power Persia TO Greece between 550 and 30 BC The collection, which includes opulent sculptures in gold and silver, explores how luxury was used as a political tool in the Middle East and southeast Europe. The exhibition can be visited until 13 August.

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