BlackRock’s Rick Rieder says take advantage of this golden age for fixed income

With the Federal Reserve expected to start cutting rates this week, BlackRock’s Rick Rieder suggests that investors take advantage of the “golden age of fixed income” now. Rieder sees a shift in the market and believes that buying yield is a compelling proposition. Traders are divided on whether the rate cut will be a quarter-point or a half-point, with Rieder leaning towards the former. He likes assets such as securitized products, high yield, and European credit. Rieder is not worried about narrow spreads in high-yield credit, as he believes fundamentals are strong. He advises investors to be selective in owning high yield, focusing on BB credit in Europe and B-rated bonds in the U.S. He also recommends combining high yield with assets like agency mortgage-backed securities and AAA-rated CLOs for a balanced portfolio.