Rick Rieder, BlackRock’s chief investment officer for global fixed income, says investors can build a diversified portfolio yielding more than 7 %, with duration below three years and average credit quality of A-. He notes that these yields have historically appeared only amid economic problems or defaults, whereas the economy remains strong and significant default risk is low. He sees investment-grade corporate bonds, including those of hyperscalers, as the best current opportunity; Alphabet, Amazon, Meta Platforms and Oracle have issued about $228.4 billion of bonds this year as of Oct. 20. His iShares Flexible Income Active ETF, ticker BINC, has a 5.66% 30-day yield and an effective duration of three years, while its allocation to investment-grade corporate bonds has risen from 8.5% in July to 14.3%. Rieder remains cautious about lower-rated credit and some AI-related bonds without hyperscaler backing, while markets price nearly a 90% probability of a Federal Reserve rate increase in December.
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