INVESTMENT STRATEGIES

BlackRock is a leader in active fixed income investing

Meet Rick Rieder: Morningstar’s 2023 Outstanding Portfolio Manager

Rick Rieder, Chief Investment Officer of Global Fixed Income, has been awarded the 2023 Morningstar Award for Investing Excellence, Outstanding Portfolio Manager. Rick Rieder’s consistent approach to managing strategies, like Strategic Income Opportunities and Total Return Fund, has helped funds stay the course in volatile markets.

Each year, Morningstar recognizes an Outstanding Portfolio Manager, an individual or team who has produced exceptional returns over the long term. To qualify for the award, the manager’s strategy must currently earn a Morningstar Analyst Rating of Gold or Silver for at least one vehicle and/or share class. For additional information, please visit: https://www.morningstar.com/funds/us-morningstar-awards-investing-excellence-2023-winners.

Why BlackRock for active fixed income?

Our active fixed income platform leverages a disciplined investment process that puts us in a position to deliver attractive returns in various market conditions.

$1.1
Trillion dollars in active fixed income solutions across mutual funds, ETFs, and separate accounts1
540
Global fixed income research analysts with deep market knowledge across sectors
30
Years of managing fixed income portfolios on behalf of global institutions and individual investors

1 Source: BlackRock. Assets under management as of 31 January 2024. All figures are represented in USD.

Active fixed income

Boost your portfolio with an active approach

Night sky glow
Breadth of Insights

Deep Market Expertise

BlackRock’s active fixed income portfolio strategies stretch across a range of investment styles and segments of the fixed income universe.

With 21 primary investment centers worldwide, our investment teams employ an investment process which is research driven, blending disciplined portfolio construction with regular risk and performance review.

Technology lab machine
Robust Operating Platform

Fundamental risk-managed framework

BlackRock features a data-driven approach to active fixed income that combines the insights of our people with a quantitative research platform to source new alpha opportunities.

Our approach integrates global trading, portfolio management and strong in-house research capabilities, enhancing execution quality and reducing operational risk.

Satellite
Trading Expertise

Engineered for an investment edge

In an environment of reduced liquidity where corporate bond inventories at primary dealers are sharply below where they were several years ago, our capital market teams work with investment banks to source bonds directly from issuers.

Global trading capabilities provide access to opportunities and liquidity that can result in cost efficiencies.

INVESTMENT STRATEGIES

Explore our range of fixed income strategies

We offer diverse fixed income strategies to help meet our clients’ needs. Our approach is to continuously adapt to changing market conditions and search for new alpha sources globally. The platform’s investment philosophy is backed by leading technology, risk management, and deep market insights.

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Active fixed income strategies

The breadth and depth of our platform puts us in a strong position to potentially deliver attractive returns in various market environments. With a focus on alpha generation and risk management, the team uses top-down view from lead portfolio managers and bottom-up expertise from our sector specialist.
Unconstrained
BlackRock’s unconstrained fixed income strategies navigate across sectors to optimize for yield, while managing downside risk.
Total Return/Core
BlackRock’s Multi-sector Core and Core Plus strategies are designed to seek consistent, attractive active returns across all market cycles via a dynamic multi-sector approa...
Short Duration
BlackRock’s Short Duration strategies employ a fundamental, diversified and relative-value approach focused solely on the front end of the yield curve.
US Investment Grade (IG Credit)
The strategy seeks to provide diversification by focusing on relative value assessments in a process to help limit downside exposures.
US Mortgage-Backed
Founded as a mortgage-focused firm in 1988, BlackRock has invested heavily in the teams and processes required to effectively manage the asset class.
Municipals
BlackRock’s municipal bond team manages a diverse set of portfolios including national and state specific mutual funds across the credit spectrum.
Inflation-Linked Bonds (ILB)
The strategy employs a fundamental, diversified, relative-value approach that focuses on real and nominal sovereign bonds.
Emerging Markets
The dedicated Emerging Markets platform strikes to help clients efficiently capture opportunities, while muting downside volatility.
Securitized Assets
BlackRock’s Securitized Assets platform employs an investment process focused on analytics, and ongoing surveillance at both the borrower and portfolio level.
Leveraged Finance
Spanning global high yield bonds and bank loans, we use a flexible approach to seek top-down and idiosyncratic opportunities across sectors.

The performance quoted represents past performance and does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor's shares, when sold or redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than the performance quoted. Standardized performance and performance data current to the most recent month end may be obtained by clicking on the fund names above.

An investment’s environmental, social and governance (“ESG”) strategy limits the types and number of investment opportunities available and, as a result, may underperform other investments that do not have an ESG focus. An investment’s ESG strategy may result in investing in securities or industry sectors that underperform the market as a whole or underperform other investments screened for ESG standards.

To obtain more information on the funds, including the Morningstar time period ratings and standardized average annual total returns as of the most recent calendar quarter and current month-end, please visit:

Total Return ETF
Strategic Income Opportunities Fund
Total Return Fund
Low Duration Bond Fund
Global Long Short/Credit Fund
Strategic Global Bond Fund
Inflation Protected Bond Fund
National Municipal Bond Fund
High Yield Bond Fund
Floating Rate Income Fund
Sustainable Total Return Fund
Sustainable High Yield Bond Fund
Impact Mortgage Bond Fund
Impact Municipal Fund 
Sustainable High Yield Bond Fund
Flexible Income ETF
Short Maturity Bond ETF
AAA CLO ETF
Floating Rate Loan ETF
Short Maturity Municipal Bond ETF
High Yield Muni Income Bond ETF

The Morningstar RatingTM for funds, or "star rating," is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.

Performance data quoted represents past performance and is no guarantee of future results. Investment returns and principal values may fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. All returns assume reinvestment of dividends and capital gains. Current performance may be lower or higher than that shown. Refer to blackrock.com for most recent month-end performance.

BlackRock provides compensation in connection with obtaining or using third-party ratings, rankings, or data

View our latest fixed income insights

View latest market views and commentaries from BlackRock’s fixed income investors and strategists

00;00;12;08 - 00;00;42;02

Russell Brownback

Probably the most exciting opportunity set I've seen in 35 years of being a fixed income investor. In fact, we're calling it the golden age of fixed income, because across virtually every asset class that exists today, you get this combination of incredibly attractive all in yields, but very low implied volatility. And when you put that together, you can create an incredible sharp ratio portfolio that's high quality and diversified.

00;00;42;05 - 00;01;11;05

Russell Brownback

We are in a different regime than anything that existed prior to the pandemic. It's a different macro regime as well as a different investment regime. So from a macro perspective, we have much faster nominal growth today. And it's driven by a handful of what we would call durable influences that don't appear to be interest rate sensitive. At the same time, you've got higher inflation decently above the Fed's target, driven by sticky core services inflation that also don't appear to be interest rate sensitive.

00;01;11;08 - 00;01;35;16

Russell Brownback

And that has four, really demonstrable impacts in markets today. One is nominal rates are higher than we are accustomed to all across the curve. Two yield curves are flatter. Three there's more volatility in these risk free rate markets. And four, there's a lot more dispersion. But again all of these things are opportunities. So the way we're tackling these is from a duration perspective.

00;01;35;22 - 00;01;59;11

Russell Brownback

We have extended duration to the front to the belly of the curve while avoiding those longer tenors. There's not enough term premium out the curve. And then in terms of asset allocation we are focused on corporate credit securitized assets, taking advantage of yields that are higher than they've been really quite frankly, in a generation.

00;01;59;14 - 00;02;21;11

Russell Brownback

The traditional use cases for fixed income are still applicable today. That being income capital preservation, and equity diversification, though, the regime is different. All of those use cases still very much are pertinent for fixed income investors. As far as, the income piece goes. Today, yields are so much higher than they've been at any time over the last couple of decades.

00;02;21;18 - 00;02;44;21

Russell Brownback

You can build a portfolio today in a diversified way across corporate credit, across securitized assets, and increasingly taking advantage of bespoke opportunities in the private credit markets. As it pertains to capital preservation. When you think about those, all in yields, and you think about the degree to which there is a cushion that we call carry break even.

00;02;44;23 - 00;03;09;15

Russell Brownback

And so in this more volatile environment, when you get these short term interest rate shocks that do create short term negative price return, your carry is so powerful. As it pertains to equity diversification. You think about the degree to which those attractive all in yields today are comprised of the risk free rate.

00;03;09;21 - 00;03;25;22

Russell Brownback

In the event of some adverse shock. There are hundreds of basis points for those expressions to rally in ways that would offset widening credit spreads, and that could help offset the kind of negative price action you would have in that adverse shock scenario in your equity portfolio.

Important information

This material is provided for educational purposes only and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are subject to change. References to specific securities, asset classes and financial markets are for illustrative purposes only and are not intended to be and should not be interpreted as recommendations. Reliance upon information in this material is at the sole risk and discretion of the reader. The material was prepared without regard to specific objectives, financial situation or needs of any investor.

THE INFORMATION CONTAINED HEREIN MAY BE PROPRIETARY IN NATURE AND HAS BEEN PROVIDED TO YOU ON A CONFIDENTIAL BASIS, AND MAY NOT BE REPRODUCED, COPIED OR DISTRIBUTED WITHOUT THE PRIOR CONSENT OF BLACKROCK, INC. (“BLACKROCK”). These materials are not an advertisement and are not intended for public use or dissemination.

This communication is not an offer and should not be deemed to be a contractual commitment or undertaking between the intended recipient of this communication and BlackRock but an indication of what services may be offered subject to a legally binding contract between the parties and therefore no reliance should be placed on this document or its content.

This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Any reference herein to any security and/or a particular issuer shall not constitute a recommendation to buy or sell, offer to buy, offer to sell, or a solicitation of an offer to buy or sell any such securities issued by such issuer.

In the U.S., this material is for institutional use only – not for public distribution.

In Canada, this material is intended for institutional investors, is for educational purposes only, does not constitute investment advice and should not be construed as a solicitation or offering of units of any fund or other security in any jurisdiction.

Capital at risk. All financial investments involve an element of risk. Therefore, the value of the investment and the income from it will vary and the initial investment amount cannot be guaranteed.

Opinions, assumptions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. We believe the information provided here is reliable, but do not warrant its accuracy or completeness. This communication and its content represent confidential information. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, accounting, legal or tax advice. You should consult your tax or legal adviser regarding such matters.

This material may contain “forward-looking” information that is not purely historical in nature. Such information may include, among other things, projections, forecasts, estimates of yields or returns, and proposed or expected portfolio composition. Moreover, where certain historical performance information of other investment vehicles or composite accounts managed by BlackRock, Inc. and/or its subsidiaries (together, “BlackRock”) has been included in this material, such performance information is presented by way of example only. No representation is made that the performance presented will be achieved, or that every assumption made in achieving, calculating or presenting either the forward-looking information or the historical performance information herein has been considered or stated in preparing this material. Any changes to assumptions that may have been made in preparing this material could have a material impact on the investment returns that are presented herein by way of example.

Past performance is not a guarantee of future results. Asset allocation and diversification strategies do not guarantee profit and may not protect against loss. Risk management and due diligence processes seek to mitigate, but cannot eliminate, risk nor do they imply low risk. Investment involves risk, including a risk of total loss.

Stock and bond values fluctuate in price so the value of your investment can go down depending upon market conditions. The two main risks related to fixed income investing are interest rate risk and credit risk. Typically, when interest rates rise, there is a corresponding decline in the market value of bonds. Credit risk refers to the possibility that the issuer of the bond will not be able to make principal and interest payments. The principal on mortgage- or asset-backed securities may be prepaid at any time, which will reduce the yield and market value of these securities. Obligations of US Government agencies and authorities are supported by varying degrees of credit but generally are not backed by the full faith and credit of the US Government. Investments in non-investment-grade debt securities (“high-yield bonds” or “junk bonds”) may be subject to greater market fluctuations and risk of default or loss of income and principal than securities in higher rating categories. Income from municipal bonds may be subject to state and local taxes and at times the alternative minimum tax. International investing involves risks related to foreign currency, limited liquidity, less government regulation, and the possibility of substantial volatility due to adverse political, economic or other developments. These risks are often heightened for investments in emerging / developing markets or smaller capital markets.

The information and opinions contained in this material are derived from proprietary and non-proprietary sources deemed by BlackRock, Inc. and/or its affiliates (together, “BlackRock”) to be reliable, are not necessarily all inclusive and are not guaranteed as to accuracy. There is no guarantee that any forecasts made will come to pass. Any research in this document has been procured and may have been acted on by BlackRock for its own purpose. The results of such research are being made available only incidentally. The views expressed do not constitute investment or any other advice and are subject to change. They do not necessarily reflect the views of any company in the BlackRock Group or any part thereof. BlackRock believes that the information in this document was correct at the time of compilation, but no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by BlackRock, its officers, employees or agents.

©2024 BlackRock, Inc. or its affiliates. All Rights Reserved. BLACKROCK is a trademark of BlackRock, Inc. or its affiliates. All other trademarks are those of their respective owners.

00;00;12;08 - 00;00;42;02

Russell Brownback

Probably the most exciting opportunity set I've seen in 35 years of being a fixed income investor. In fact, we're calling it the golden age of fixed income, because across virtually every asset class that exists today, you get this combination of incredibly attractive all in yields, but very low implied volatility. And when you put that together, you can create an incredible sharp ratio portfolio that's high quality and diversified.

00;00;42;05 - 00;01;11;05

Russell Brownback

We are in a different regime than anything that existed prior to the pandemic. It's a different macro regime as well as a different investment regime. So from a macro perspective, we have much faster nominal growth today. And it's driven by a handful of what we would call durable influences that don't appear to be interest rate sensitive. At the same time, you've got higher inflation decently above the Fed's target, driven by sticky core services inflation that also don't appear to be interest rate sensitive.

00;01;11;08 - 00;01;35;16

Russell Brownback

And that has four, really demonstrable impacts in markets today. One is nominal rates are higher than we are accustomed to all across the curve. Two yield curves are flatter. Three there's more volatility in these risk free rate markets. And four, there's a lot more dispersion. But again all of these things are opportunities. So the way we're tackling these is from a duration perspective.

00;01;35;22 - 00;01;59;11

Russell Brownback

We have extended duration to the front to the belly of the curve while avoiding those longer tenors. There's not enough term premium out the curve. And then in terms of asset allocation we are focused on corporate credit securitized assets, taking advantage of yields that are higher than they've been really quite frankly, in a generation.

00;01;59;14 - 00;02;21;11

Russell Brownback

The traditional use cases for fixed income are still applicable today. That being income capital preservation, and equity diversification, though, the regime is different. All of those use cases still very much are pertinent for fixed income investors. As far as, the income piece goes. Today, yields are so much higher than they've been at any time over the last couple of decades.

00;02;21;18 - 00;02;44;21

Russell Brownback

You can build a portfolio today in a diversified way across corporate credit, across securitized assets, and increasingly taking advantage of bespoke opportunities in the private credit markets. As it pertains to capital preservation. When you think about those, all in yields, and you think about the degree to which there is a cushion that we call carry break even.

00;02;44;23 - 00;03;09;15

Russell Brownback

And so in this more volatile environment, when you get these short term interest rate shocks that do create short term negative price return, your carry is so powerful. As it pertains to equity diversification. You think about the degree to which those attractive all in yields today are comprised of the risk free rate.

00;03;09;21 - 00;03;25;22

Russell Brownback

In the event of some adverse shock. There are hundreds of basis points for those expressions to rally in ways that would offset widening credit spreads, and that could help offset the kind of negative price action you would have in that adverse shock scenario in your equity portfolio.

Important information

This material is provided for educational purposes only and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are subject to change. References to specific securities, asset classes and financial markets are for illustrative purposes only and are not intended to be and should not be interpreted as recommendations. Reliance upon information in this material is at the sole risk and discretion of the reader. The material was prepared without regard to specific objectives, financial situation or needs of any investor.

THE INFORMATION CONTAINED HEREIN MAY BE PROPRIETARY IN NATURE AND HAS BEEN PROVIDED TO YOU ON A CONFIDENTIAL BASIS, AND MAY NOT BE REPRODUCED, COPIED OR DISTRIBUTED WITHOUT THE PRIOR CONSENT OF BLACKROCK, INC. (“BLACKROCK”). These materials are not an advertisement and are not intended for public use or dissemination.

This communication is not an offer and should not be deemed to be a contractual commitment or undertaking between the intended recipient of this communication and BlackRock but an indication of what services may be offered subject to a legally binding contract between the parties and therefore no reliance should be placed on this document or its content.

This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Any reference herein to any security and/or a particular issuer shall not constitute a recommendation to buy or sell, offer to buy, offer to sell, or a solicitation of an offer to buy or sell any such securities issued by such issuer.

In the U.S., this material is for institutional use only – not for public distribution.

In Canada, this material is intended for institutional investors, is for educational purposes only, does not constitute investment advice and should not be construed as a solicitation or offering of units of any fund or other security in any jurisdiction.

Capital at risk. All financial investments involve an element of risk. Therefore, the value of the investment and the income from it will vary and the initial investment amount cannot be guaranteed.

Opinions, assumptions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. We believe the information provided here is reliable, but do not warrant its accuracy or completeness. This communication and its content represent confidential information. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, accounting, legal or tax advice. You should consult your tax or legal adviser regarding such matters.

This material may contain “forward-looking” information that is not purely historical in nature. Such information may include, among other things, projections, forecasts, estimates of yields or returns, and proposed or expected portfolio composition. Moreover, where certain historical performance information of other investment vehicles or composite accounts managed by BlackRock, Inc. and/or its subsidiaries (together, “BlackRock”) has been included in this material, such performance information is presented by way of example only. No representation is made that the performance presented will be achieved, or that every assumption made in achieving, calculating or presenting either the forward-looking information or the historical performance information herein has been considered or stated in preparing this material. Any changes to assumptions that may have been made in preparing this material could have a material impact on the investment returns that are presented herein by way of example.

Past performance is not a guarantee of future results. Asset allocation and diversification strategies do not guarantee profit and may not protect against loss. Risk management and due diligence processes seek to mitigate, but cannot eliminate, risk nor do they imply low risk. Investment involves risk, including a risk of total loss.

Stock and bond values fluctuate in price so the value of your investment can go down depending upon market conditions. The two main risks related to fixed income investing are interest rate risk and credit risk. Typically, when interest rates rise, there is a corresponding decline in the market value of bonds. Credit risk refers to the possibility that the issuer of the bond will not be able to make principal and interest payments. The principal on mortgage- or asset-backed securities may be prepaid at any time, which will reduce the yield and market value of these securities. Obligations of US Government agencies and authorities are supported by varying degrees of credit but generally are not backed by the full faith and credit of the US Government. Investments in non-investment-grade debt securities (“high-yield bonds” or “junk bonds”) may be subject to greater market fluctuations and risk of default or loss of income and principal than securities in higher rating categories. Income from municipal bonds may be subject to state and local taxes and at times the alternative minimum tax. International investing involves risks related to foreign currency, limited liquidity, less government regulation, and the possibility of substantial volatility due to adverse political, economic or other developments. These risks are often heightened for investments in emerging / developing markets or smaller capital markets.

The information and opinions contained in this material are derived from proprietary and non-proprietary sources deemed by BlackRock, Inc. and/or its affiliates (together, “BlackRock”) to be reliable, are not necessarily all inclusive and are not guaranteed as to accuracy. There is no guarantee that any forecasts made will come to pass. Any research in this document has been procured and may have been acted on by BlackRock for its own purpose. The results of such research are being made available only incidentally. The views expressed do not constitute investment or any other advice and are subject to change. They do not necessarily reflect the views of any company in the BlackRock Group or any part thereof. BlackRock believes that the information in this document was correct at the time of compilation, but no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by BlackRock, its officers, employees or agents.

©2024 BlackRock, Inc. or its affiliates. All Rights Reserved. BLACKROCK is a trademark of BlackRock, Inc. or its affiliates. All other trademarks are those of their respective owners.