2 min listen
Gargi Chaudhuri, Head of iShares Investment Strategy Americas, BlackRock
FromAlpha Exchange
ratings:
Length:
50 minutes
Released:
Jul 28, 2022
Format:
Podcast episode
Description
Getting her start in 2001 as the TIPS products was just a few years old, Gargi Chaudhuri has been a market participant in inflation-linked securities for more than 2 decades, a time over which she’s developed expertise in a product that has become front and center to the unique risk dynamics of 2022. Our conversation first explores the evolution of the TIPS market, from its early days where even a small notional trade could impact pricing to today when large institutions are assuming and reducing inflation exposures and, of course, the Fed is non-trivial presence in the market. In this context, we discuss the relative prices of TIPS and nominal bond prices and the real yields and break-even levels derived from them.Here, Gargi points to potential areas of distortion, citing the rapid rise in 10 year real yields from -100bps at the start of 2022 to as high as 80bps in early June. While disruptive, this repricing does pave the way for finding value in the asset class. We next discuss Gargi’s work at Head of Investment Strategy within IShares at BlackRock. With the mantra that “staying invested is the North Star”, she walks through the exposure shifts that can reduce volatility and drawdowns during bear market periods. Here, she discusses using “min vol” as well as other defensive sectors like healthcare that have good pricing power amidst the regime of elevated inflation.We finish by exploring the topic of decision-making under uncertainty and hearing what Gargi is more and less confident about. While feeling good about the various frameworks her team has built to understand inflation and flows, she is less sure about the changing Central Bank reaction function to incoming data. I hope you enjoy this episode of the Alpha Exchange, my conversation with Gargi Chaudhuri.
Released:
Jul 28, 2022
Format:
Podcast episode
Titles in the series (100)
Welcome to the Alpha Exchange: The Alpha Exchange is a podcast series launched by Dean Curnutt to explore topics in financial markets, risk management and capital allocation in the alternatives industry. Our in-depth discussions with highly established industry professionals seek to uncover the nuanced and complex interactions between economic, monetary, financial, regulatory and geopolitical sources of risk. We aim to learn from the perspective our guests can bring with respect to the history of financial and business cycles, promoting a better understanding among listeners as to how prior periods provide important context to present day dynamics. by Alpha Exchange