This week, we speak with Rick Rieder, who is BlackRock‘s chief investment officer of global fixed income, head of the fundamental fixed income business, and head of the global allocation investment team. He is responsible for some $2.4 trillion in assets. Before joining BlackRock in 2009, Rieder was president and chief executive officer of R3 Capital Partners.
We discuss how he found his way into fixed income, spending 20 years at Lehman Brothers. He left early 2008 to launch his own hedge fund and missed the last phase of Lehman’s existence.
He explains why indexing is so effective for equities, but active is advantageous in bonds. There are many individual bond issuances — more than 10X equities — that screening for quality is an automatic advantage. Looking around the world, fixed income treats Emerging Markets and Developed Markets ex-US as a monolith but there are huge variations in quality.
We also discuss the value of some mystery at the central bank. There is (if possible) too much communication and too much communication from the Federal Reserve. The Fed has lost the “Art of Surprise,” and that affects its ability to move markets.
You can stream and download our full conversation, including any podcast extras, on iTunes, Spotify, Stitcher, Google, YouTube, and Bloomberg. All of our earlier podcasts on your favorite pod hosts can be found here.
Be sure to check out our Masters in Business next week with Tim Buckley, CEO of the Vanguard Group. He began his career at Vanguard 32 years ago, as an assistant to then Chairman John Bogle. He previously served roles as Chief Information Officer, as well as Chief Investment Officer.
Rick Rieder’s favorite books
The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies by Erik Brynjolfsson and Andrew McAfee
The Tipping Point: How Little Things Can Make a Big Difference by Malcolm Gladwell
Permission to Feel by Marc Brackett