3+1 Active Investor Series

VIDEO SERIES

“3 Things You Need to Know + 1 You Don’t!”
The 3+1 Active Investors Series is BlackRock’s weekly investor video franchise, created to start your week with insights from the voices shaping markets. Featuring the firm’s leading active investors, each episode highlights three perspectives on what’s driving markets today.

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Episode 109A: Pat Haskell

No raccoons were harmed in the making of this 3+1.

Good morning. I'm Pat Haskell, head of the municipal bond group at BlackRock. It's the week of June 29th. Here are the three things you need to know. And one, you don't.

First up.

Most U.S. investors can take advantage of the municipal bond market. The tax equivalent yields are very attractive levels and the default rate is a fraction of that of their taxable counterparts. Credit is in a very solid state. Revenues have increased five consecutive quarters on a state level, as the muni curve is steeper than the taxable curve. We have almost 100 basis points of compensation there. That’s meaningful, stable income in your portfolios.

Number two.

Pre-paid gas was less than 1% of the market pre-covid, and now it’s now almost 10% of the intermediate benchmark. There is a detail in the tax code that allows borrowers to use the tax exempt market. It allows the end user to actually get their stockpiles of gas or electricity at a cheaper price. Now what’s different about that is it’s not the municipality that’s the risk. Most recently Alphabet borrowed over $1 billion dollars and saved almost 100 basis points from where they would have borrowed in the taxable market. We expect that the other hyperscalers will also participate in this part of the marketplace.

Number three.

The biggest change in the way we’re investing is by using technology. We have almost 100 algos running at all times. Helping us execute trades, helping us evaluate different situations in the marketplace. What we’ve been able to do is have over 155,000 official statements downloaded to help create our data lake. We’re looking at over 70,000 trades a day that we can then have our algos run, look at value in the marketplace, and getting in deep into the details of all of our issuers that we invest in.

And the one thing you don't need to know…

is last evening, while walking outside to throw away the trash like I do every Sunday evening, I was almost killed by a raccoon. And there it was…a quick first three steps just like I did when I played football.

To get more 3+1 and stay up on everything you need to know, and some things you don't, make sure to follow us on LinkedIn and YouTube. We'll see you next week.

3+1 Episode 9: Patrick Haskell

In this episode of 3+1, Pat Haskell, Head of the Municipal Bond Group at BlackRock, breaks down what investors should know about today's municipal bond market.

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Transcript: FC2 061726
Episode 108: Rich Mathieson

Alright!

Good morning, everyone. I'm Rich Mathieson, portfolio manager for BlackRock’s systematic equity business. It’s the week of June 22nd. And here are three things you need to know and one you don’t.

First Up. We have a definite divergence between the AI trade beneficiaries— the build out of data centers, semiconductors, energy transmission networks, versus consumer expenditure. When we look across the consumer complex we see evidence of declining real spending power. We see the outlook on both defensive and discretionary securities, being a lot more of a challenge than any areas that are exposed to the themes of the AI trade.

Next Up. Deep analysis of data that gives us a sense for customer, supplier, competitor relationships, has enabled us to position portfolios for the broadening of the AI trade further down the supply chain, and moving from US to global equity markets. Some of the best contributors to performance on our global portfolios this year, tech names in areas like Europe, Japan, Taiwan and Korea. Those linkage insights have enabled us to capture the beneficiaries of that rotation.

Which brings us to. In the world where bonds and equities are often moving together, we can generate a return stream that is uncorrelated to traditional asset classes. Whether equity markets are going up or down, as long as the long side of our portfolio is doing better than the short side and outperforming, we should expect a positive return. Any capability that can produce a genuinely diversifying return stream is going to be very, very valuable in client portfolios.

And the one thing you don't need to know. Basketball was my main sport. We had a very very good school team. So obviously embracing American sport. I did offer my services to the local team here, but in 2016 they definitely did have a very very good point guard by the name of Mr. Curry. So they declined and that was why I’ve been doing systematic investing here in San Francisco for the last 10 years

To get more 3+1 and stay up on everything you need to know, and some things you don’t… Make sure to follow us on LinkedIn & YouTube. We’ll see you next week.