Yet again, Pimco [profile] and BlackRock [profile] took opposite investment decisions, with BlackRock embracing European bonds and Pimco cutting holdings of those bonds, The Wall Street Journal reporter Min Zeng reports.

Despite concerns about European governments' stability, BlackRock is adding bonds from Spain and Italy, The Wall Street Journal reports. The story doesn't mention how much BlackRock increased holdings of those bonds. Min Zeng interviewed Rick Reider, chief investment officer of fundamental fixed income and co-head of Americas fixed income.

The global buying spree doesn't end there. Reider told Zeng that BlackRock bought Mexican peso, Brazilian government bonds and corporate bonds below investment grade in the U.S. and in Asia. According to Zeng, Reider said the selloff in global bond markets was "overdone" and that investors should take a more flexible approach in their bond portfolios as interest rates will move higher.

In a separate article, Zeng interviewed Andrew Balls, head of European portfolio management at Pimco, said the firm has cut holdings of bonds in Italy and Spain, noting that the economy is hurting and policymakers there have not made enough headway to signal Europe is on its way to getting back on track. Zeng writes that Pimco had already begin cutting holdings of Spanish and Italian bonds beginning in April. To read more, click here and here.  

Edited by: Casey Quinlan


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