BlackRock increases overweight on investment grade credit

BY Reuters | CORPORATE | 11/21/22 10:47 AM EST

NEW YORK, Nov 21 (Reuters) - Asset manager BlackRock (BLK) said on Monday it had increased its strategic overweight on investment grade credit due to attractive valuations and the income potential coming from corporate bonds' higher yields.

"We go more overweight investment grade (IG) credit on attractive yields and healthy corporate balance sheets that can withstand the mild recession we expect," strategists at the BlackRock Investment Institute said in a note. (Reporting by Davide Barbuscia)

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

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