BlackRock Inc. the world's largest money manager, has cut holdings of Italy and Spain government bonds over the past three months. The firm may shed more if the euro-zone's growth outlook deteriorates.
"We have been less enthusiastic about euro-zone sovereign debt compared to three to six months ago," said Rick Rieder, chief investment officer of fundamental fixed income and co-head of Americas fixed income at BlackRock. "If growth continues to deteriorate in the euro zone, due in large measure to weak private-sector lending from a deleveraging banking sector, we would further reduce our positions in the euro zone, such as in Italy and Spain."
Speaking in a phone interview with The Wall Street Journal on Tuesday, Mr. Rieder said for the moment, BlackRock still holds an overweight position on Italy and Spain, though the position is now more moderate after the recent reduction in the Spanish and Italian holdings.
The company, with more than $3.7 trillion in assets under management, was among global investors scooping up sovereign bonds, especially in Italy, after European Central Bank President Mario Draghi last summer pledged to do "whatever it takes" to preserve the euro.