BlackRock's Fink Advises All-Stock Holdings -- But Not For His Firm, Clients

Larry Fink, chief executive of BlackRock, Inc., the world's largest asset manager, says he thinks investors should be 100% invested in stocks right now.

But don't expect the $3.5-trillion firm to adopt an all-equities investment strategy anytime soon.

In an interview on Bloomberg television Wednesday morning, Fink said low valuations and high dividend yields on stocks are returning more than bonds at the moment, making it "a pretty easy decision" to go to an all-stock allocation. "Be 100 percent in equities," he said, according to a Bloomberg report on the interview.

The remark raised eyebrows around Wall Street, where traders have been noting the major stock indexes have already risen about 20% since early October, with many market indexes hitting three-year highs, and how the market now appears over-bought on technical charts.

But a spokeswoman for BlackRock said Fink's opinion was his own and didn't signal any change in strategy on the part of the firm, which lists 25 different fixed-income product strategies alone, in addition to real estate, cash management, currencies, commodities, and equities.

"No, no, no, it's Larry's view and I think he has good ground for that," said the spokeswoman, Katherine Cheung. "We have a lot of different types of management (philosophies) and different types of portfolios and strategies."

She said Fink was responding to a question about how he would advise investors, and: "He was using a scenario that bonds are not yielding as much as high-dividend stocks and this is where his rationale comes from. He wants investors to feel more confident about the (stock) market as well, and focus on long-term trends rather than short-term volatility."

Another product offering from BlackRock is iShares - the world's largest ETF sponsor with 440 funds and $480 billion in assets, many dozens of which are built on stocks, and would conceivably benefit from a large inflow of investor capital.

Cheung said Fink wasn't thinking of BlackRock's own bottom line when he advocated an absolute exposure to the stock market. "There's no way we're going to advise people because of our own agenda," she said. "I can assure you that is not the case."

-By Christian Berthelsen, Dow Jones Newswires; 212-416-2381; christian.berthelsen@dowjones.com.

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