January 25, 2011 / 8:49 PM / 9 years ago

BlackRock bond managers favor credit, mortgage debt

BOSTON, Jan 25 (Reuters) - Portfolio managers at BlackRock Inc (BLK.N), the world’s biggest asset manager, are favoring corporate and mortgage debt over U.S. Treasury bonds, chief executive Laurence Fink said on Tuesday.

“We still believe credit is going to be a good place to be,” Fink said on a call with analysts to discuss his firm’s fourth quarter results. “We actually love mortgages at this level. So there’s many opportunities to make better returns than Treasuries and fixed income.”

New York-based BlackRock finished 2010 with $3.56 trillion of assets under management, including $592 billion of actively managed fixed-income accounts, $186 billion of so-called multi-strategy funds that can invest across many asset classes and $110 billion of alternative assets such as hedge funds.

Fink praised his firm’s 2010 performance, noting that managers had rejected overly pessimistic economic scenarios such as competitor Pimco’s “New Normal.”

The phrase, coined by Pimco Chief Executive Mohamed El-Erian, is meant to describe the case for slower U.S. economic growth of about 2 percent and persistently high unemployment.

“I would like to note that we as a firm have been more right than most firms in the prognostication of where the markets were going to go in 2010,” Fink said on the call. “We never believed in the, quote-unquote, new normal. We were always talking about a market — a U.S. economy growing 3-plus.”

Reporting by Aaron Pressman; Editing by Bernard Orr

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