BlackRock's Rieder reduces holdings of US investment grade and high yield bonds, saying "very positive" on emerging markets.

Rick Rieder, Global Chief Investment Officer of BlackRock Fixed Income, said that he is reducing exposure to US investment-grade bonds and high-yield bonds, while increasing holdings in emerging market bonds, due to favorable valuations and a weak US dollar. Rieder said on Friday that the yield spread in the US credit markets is currently hovering near its lowest level in thirty years, and with an increase in bond supply, this spread is not attractive enough. He mentioned that one of the reasons for his optimism in emerging markets is that the yield premium relative to US junk bonds is at historically attractive levels. "We really like emerging markets," he said. "The US dollar will continue to be constrained. The yield spread between emerging markets and high-yield bonds is almost at historically high levels." He also added that after a strong performance in European markets last year, he has shifted some investments from Europe to Asia.