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BlackRock $85 Billion Manager Says Stock Pickers' Time Has Come
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Loading...Dan Chamby, who manages $85 billion for BlackRock Inc., says central banks’ loss of power over markets means old-style stock investors can get back to what they do best.
Chamby is buying again after having 21 percent of holdings in cash at the end of last year. He says the turmoil in share markets is natural as traders numbed by years of stimulus relearn how to price risk, and instead of agonizing about monetary policy makers’ next steps, he’s poring over economic data and looking for bargains. He’s going against many investors, and colleagues within BlackRock, with bets that oil will rebound.
“We have to become much more fundamentally focused,” Chamby said in a phone interview from Princeton, New Jersey. Now is a time for stock pickers to “begin to distinguish ourselves.”
Chamby managed $85 billion at the end of January, he said. That’s down from $100 billion in April. The BlackRock Global Allocation Fund, the largest he helps oversee with $45.5 billion in assets, lost 5.1 percent this year to beat 36 percent of peers, according to data compiled by Bloomberg. It posted an annualized gain of 2.9 percent over five years, topping 60 percent of competitors, the data show. Since inception in 1989, its average yearly return is 10 percent, according to BlackRock.
The fund had 59 percent of assets in equities and 24 percent in bonds at the end of January. It reduced cash to 16 percent of holdings, and its three largest stock picks were Apple Inc., Alphabet Inc. and Uber Technologies Inc. Chamby says he’s been buying energy, health-care and technology shares, while declining to specify which ones.
The 55-year-old says he’s convinced oil prices will rebound. U.S. crude traded at $31.17 a barrel on Wednesday and has fallen more than 70 percent since June 2014. He’s looking at cheap companies with interesting reserves and firms that process and transport the commodity.
Marathon Petroleum Corp., the Ohio-based refiner whose shares have lost 40 percent in the past 12 months, is one of the top five stock holdings in the global allocation fund. It trades at about 7.2 times estimated earnings.
“We are feeling rather alone” in the oil bet, Chamby said. “Out in the wilderness. Not even our colleagues within BlackRock seem to support us on that.”
Bloomberg
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