Rick Rieder (BlackRock): “We Are in an Environment of Earning the Coupon, Capturing Carry, and Sleeping Soundly”

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Rick Rieder, Global CIO of Fixed Income at BlackRock, is one of the most respected and influential voices in the global asset management industry. Known for being a “data maniac,” as he himself admits, he oversees approximately $2.4 trillion (trillions in Anglo-Saxon nomenclature) for the firm, in addition to serving on Alphabet’s advisory board and UBS’s investment committee. His name was even mentioned as a possible candidate to head the Fed—at least, it was an option that appealed to the markets.

During his participation in BlackRock’s annual event for Latin American and US offshore investors in Miami, Rieder speaks with us. The room is spacious, a pleasant spring warmth filters through the windows, and his deep voice fills the space with comfort. The way he gestures with his hands reveals that Rieder is a methodical man; for that reason, we begin our interview by asking him about his working method.

How do you manage to isolate yourself from noise to do your work?

From my perspective, I am absolutely obsessed with data. I study it very intensely. I think there is too much focus on anecdotal information that is not very relevant, and it often creates inertia of biased information. I read a huge number of corporate earnings reports, which tell me what companies are doing with their inventories, why they are hiring staff, or what they are doing with capex. For me, that is the best source of information. I learn a great deal. In fact, I experience it like a game, like a treasure hunt: you read a report and look for clues. I also have monthly calls with clients, which I’ve been doing for 30 years, and I have my own process that involves reviewing about 1,000 charts and tables. Literally, I lock myself away to analyze them two days a month. All of that helps me piece together the puzzle, and I cannot do it without studying the data. Even though I have a great team that helps, I need to process it myself. Then I integrate all that information and build a view that is not always correct, but I need to go through that process.

As a result of that analysis, what differences have you identified between narratives and information?

We are seeing something we have never seen in this generation: an economy that works very well, but only with two engines. On the one hand, there is massive investment in technology, AI, and data centers, which is sustaining the economy and tech equity markets. On the other hand, there is a high-income cohort that is doing very well, even benefiting from high rates because they are net savers. The top 10% accounts for 23% of consumption, while the bottom 40% accounts for 22%. That is a huge distortion. Therefore, when you look at the economy as a whole, it appears strong—you can have nominal GDP growth of 5.5% or even 6%—but it is only functioning well on two fronts. The majority of the population is struggling, and that is why I have been quite clear regarding interest rates: they mainly affect those in a worse situation.

From all the information on corporate earnings, what relevant conclusions have you reached?

From bank earnings, I would highlight that M&A activity is real. It is clearly visible in the results: companies are becoming more strategic, making acquisitions to reduce costs and grow. Trading activity, especially in equities, has been very high, which makes sense in a volatile environment. Another point that I think has been greatly exaggerated is concern about private credit. During this earnings season, there was talk of stress, but I think it is often overstated by anecdotal stories. When you look at the results of major banks, the “mark-to-market” stress appears less severe than some interpretations suggest. As for technology, I am impressed by the figures. The market is pricing in explosive growth in the short term, but with caution in the medium term, because there could be technological changes that reduce demand. Personally, I think the market is being too conservative: demand has more runway than is being priced in.

Returning to your reflection on the distortion in economic growth, do you think there is an employment problem?

There is no job growth. In fact, excluding healthcare, we have lost 378,000 jobs over the past 10 months, which is surprising given an economy growing at that pace. We have an employment problem. From the outside, it seems the Fed does not need to do anything, but the reality is that the economy is not working well for most people. And we still have to see the real impact of artificial intelligence (AI), which has not yet arrived. It remains to be seen how all that technological efficiency will translate in companies that are already more efficient even before AI has its full impact. We have not yet seen that impact, and we already have no job growth. Some say it is not concerning because labor supply is lower due to immigration, but it is still a problem: there are not enough job openings.

We have read your analysis on the “weakness of the labor market” for young people. Is it a trend? Is it related to AI?

I think it is a disaster. The unemployment rate among college graduates is the highest in a generation, and youth unemployment (ages 16–24) is increasing. There are several factors: on the one hand, people over 55 are staying in the labor market longer, reducing vacancies, and on the other, we have the impact of technology and AI. I think it is a serious problem for young people and low-income groups. And it is ironic: older people, with higher incomes, benefit from high rates because they are savers, while young people are the ones with debt.

Let’s move to economic policy. What should we expect from the Fed? And regarding the deficit and interest rates?

I mean, first of all, the United States has too much debt, and almost all of it is in the short end of the yield curve. We rely on Treasury bills, and I think no company would manage its business like that. We need to reduce debt; otherwise, the dollar will remain under pressure. There are only two ways to do that: cut spending—which will not happen soon—or grow faster than the debt. This leads me to believe that the reason the Fed will cut interest rates is that a large portion of the country’s financing is short-term. They will have to wait a bit because of the impact of oil, but even so, I think they can make two cuts this year. If it were up to me, I would cut rates right now, regardless of oil or the potential impact on food. The longer we keep rates high, the more we worsen the debt problem.

As for the neutral rate that the market currently estimates, I do not think it is correct. I believe it is considerably lower than what is assumed, for two reasons: first, productivity is helping to reduce inflation, and second, the interest rate tool no longer regulates investment (capex) as it once did. Therefore, interest rates no longer significantly influence business investment, which is a huge difference compared to the past. In reality, rates mainly affect the housing market, low-income groups, and small businesses, which are the ones suffering the most. How could that not indicate that current rates are too restrictive? Moreover, they are not significantly reducing inflation. Therefore, I think they are restrictive precisely in the areas where it matters most.

That said, I have learned in my career that you must invest not based on what I would do, but on what they are going to do. It took me 20 years to understand that. I always thought: “this is a good idea, they will do it.” But the only thing that matters is what they will actually do. And I do not think they will cut rates now. I think they will wait one more meeting, analyze the data, unemployment will rise a bit, and then they will cut rates.

In this context of monetary policy, how do you interpret inflation?

There is a big difference between demand-driven inflation and supply-driven inflation. I think it is unfair to say we have an oil shock. I think we are facing a supply shock, and that shock, by itself, will already slow the economy. We do not need higher rates to curb it, as that will reduce consumption, especially among lower-income households. Today we are at core inflation close to 3%, and we believe it will fall to 2.5% by the end of the year. The Fed’s target is 2%, but that does not mean we need to get there next month. As long as it stays around 3% due to the oil shock, it will already have its effect.

Are you still very convinced about the rise of the fixed income cycle? Are we already there or has something changed?

We are in a golden age of fixed income. In five years, we will look back and say: my goodness, we could build portfolios with very attractive returns. Real rates are spectacular. You can build a portfolio with a yield of 6% or 6.25%. If inflation is at 3%, that is a very attractive real return. If you look at the 20 years prior to COVID, we had negative rates in Europe and Japan, and close to zero in the US. Now you can get 6% or more, and not with low-quality assets: you can use agency mortgages, AAA CLOs, AAA assets. When I say it is a golden age of fixed income, it is not because I think we will make a lot of money from rate cuts; it is more an environment of earning the coupon, capturing carry, and sleeping soundly. I think the Fed will act cautiously and that long-term rates will not fall too much.

Do you see value in the widening of corporate credit spreads?

I think public credit markets are simply fine; they are not exceptional. Securitized markets and emerging markets are more attractive in relative terms. I like places like Mexico and parts of Brazil, especially if you are willing to take currency risk—and I think you can, because I do not expect significant dollar appreciation. That is why emerging markets are more attractive than credit today. Securitized assets as well, since you can structure them yourself with better collateral. Securitization markets are in very good shape: commercial real estate, residential, asset-backed securities.

You mentioned emerging debt. In this case, the issue is the dollar, but do you like the Mexican peso?

I like the yield that Mexico offers. I do not have a strong view on the peso, but I do think the dollar will not appreciate much; it could even depreciate slightly. If we talk about the country’s debt, I think the administration is receptive to a weaker currency. So, in Mexico’s case, I think the peso against the dollar should remain stable and might even appreciate somewhat. But the important thing is that the yield is very attractive, as long as you are willing to take that risk. I use strategies in volatility markets, such as selling options on my positions, which allows me to generate even more return. Given that volatility in emerging markets, especially in currencies, is high, very attractive returns can be generated in places like Mexico.

For about three years now, BlackRock has made a significant innovative bet with the launch of iBonds. To some extent, you have been the “brain” behind these vehicles. Are you thinking about something equally revolutionary for the future in the fixed income world?

I think the big change in fixed income is that, for 30 or 40 years, fixed income was that 40 added to the equity portfolio in the classic 60/40. But in recent years it has been shown that it no longer works that way. From 2023 until now, every time the equity market has suffered, traditional fixed income indices have also fallen, because inflation affects both bonds and equities in the same way. The big evolution is that now people think about what to do with that 40 and whether they can build a source of income from it and manage it without taking excessive risks, in such a way that they can combine that income with equities and also with private assets.

What is needed is for fixed income to be stable. Traditionally, people thought they knew how interest rates would behave, but now it is different, and I think it will remain so in the coming years. Interest rates are still a useful tool, when they fall, equities rise and bonds also perform well, but that is not a good hedge nor does it create balance. It simply amplifies both positive and negative returns. The idea of managing a balanced and resilient portfolio has changed, and more and more tools and products are pointing in the same direction: helping investors generate income, which I will combine with equities, private equity, or other assets.

The Fed Heads Into Its Meeting With a Message of Continuity and Powell’s Farewell

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The Fed is expected to keep its benchmark interest rate unchanged at its meeting, despite pressure from the energy sector. According to experts, the information currently available to voting members of the FOMC does not allow for identifying any possible transmission effect of rising energy prices to core prices. So, what can we expect from this meeting?

According to Erik Weisman, chief economist, and Kish Pathak, fixed income analyst at MFS Investment Management, the overall message will be that monetary policy is in a good position to “wait and see” how growth and inflation prospects evolve. “As early as March 18, Chairman Powell downplayed economic projections, given the uncertainty related to the conflict. He is likely to reiterate that the outlook depends on the conflict. Although the uncertainty associated with the war in Iran has decreased since then, it remains very high. Nevertheless, the market will be very attentive to any change in tone regarding growth and inflation prospects,” they acknowledge.

What we do know for certain, as shown by the minutes of the March meeting, is that a minority view is emerging according to which rate hikes may be necessary to protect the inflation aspect of the mandate. “Chairman Powell may have to answer questions seeking to clarify what developments could tilt the FOMC in that direction. He will likely state that it is too early to make that judgment and that monetary policy is in a good position to balance risks on both sides of the mandate. This would be in line with most of the Fed’s communications since the March meeting,” say the experts at MFS IM.

Issues on the Table

For his part, Mabrouk Chetouane, Chief Markets Strategist at Natixis IM Solutions, believes that what is at stake in this meeting is twofold. “First, to anchor investor expectations regarding interest rates and inflation in order to avoid any undesired tightening of financial conditions; and second, to maintain a range of options available to address any type of scenario,” Chetouane notes.

In his view, this energy crisis could lead to a significant decline in aggregate demand. “We believe cyclical risks could materialize and that the Fed’s reaction function continues to place greater importance on economic activity and, consequently, the labor market. We maintain that the Fed could cut its benchmark interest rate by between 25 and 50 basis points between now and 2026, not to satisfy the wishes of the White House, but due to the need to support demand,” he adds.

Given this strong confidence that Powell’s Fed will opt for continuity, Marco Giordano, Investment Director at Wellington Management, recalls that central bank decisions will be determining factors for the global cycle in the coming quarters, as policymakers absorb this latest exogenous shock and act accordingly. “Throughout the month of March, central banks around the world chose to keep interest rates unchanged, citing rising geopolitical risks and uncertainty surrounding inflation prospects driven by energy prices,” he comments.

The Handover Arrives

Another of the most important aspects of the April meeting is that it will be Chairman Powell’s last press conference, if Kevin Warsh is confirmed soon. “He will likely be asked again about his decision to remain a Board member after the end of his term as chairman and how that decision could change if the Department of Justice investigation is closed. Most likely, he will repeat that he has not yet made a decision on the matter,” acknowledges Weisman.

What might a Warsh Fed look like? For Eiko Sievert, Head of Public and Sovereign Sector Ratings at Scope Ratings, if Kevin Warsh is confirmed as the next Chairman of the Federal Reserve, he is likely to advocate for interest rate cuts based on his view that AI-driven growth will not generate inflation.

“His appointment would point to a significant reduction in the intensity of supervision and a shift toward deregulation, as well as a more limited focus on the Fed’s dual mandate of ensuring stable prices and maximum employment. As a result, issues such as climate risk and social equity are likely to receive significantly less attention. Reducing the Fed’s balance sheet will be a priority, although implementation is likely to remain gradual to avoid undue market volatility,” Sievert emphasizes.

Finally, the expert sees it as likely that there will be changes in how the Fed communicates publicly, with less forward guidance on FOMC members’ expectations regarding future interest rates.

“With this background scenario, the June FOMC meeting will be subject to close scrutiny. Rate cuts carried out without data backing a decline in inflationary pressures would signal a weakening of the Fed’s independence,” he concludes.

The Fed Enters a “New Regime,” but What About Its Independence?

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After hearing Kevin Warsh before the Senate, during his confirmation hearing to chair the U.S. Federal Reserve (Fed), experts believe that not all the cards have been put on the table. In his speech, Warsh proposed a “regime change” at the institution, suggesting more than four FOMC meetings, collaborating with the Treasury to reduce the balance sheet, and using AI tools to review inflation models he considers imperfect.

Without a doubt, markets expected Kevin Warsh’s confirmation hearing to offer clues about the Fed’s next steps and, to some extent, it did. His key message was to assure that he would not be a “puppet” of President Trump and that the monetary institution must act without political pressure. He even denied having agreed on interest rate cuts with Trump, arguing that monetary policy decisions must be based on the economy and not politics.

“Let me be clear: the Federal Reserve must make independent decisions. I will not accept instructions from any elected official. My duty, if confirmed, will be to Congress and to the American people. I am also aware of concerns about potential conflicts of interest. I commit to fully complying with all ethical requirements and to divesting from the necessary assets to ensure the integrity of the office,” he assured.

In addition, he was critical of the institution: “In recent years, the Fed has faced extraordinary challenges. However, we must also recognize that there have been errors — in the assessment of inflation, in the communication of monetary policy, and in the management of its balance sheet — that must be addressed frankly.”

Regarding his plans, Warsh explained that his goal will be to restore clarity, discipline, and credibility in monetary policy. “This implies a firm commitment to price stability, a review of the Fed’s strategic framework, and a prudent and predictable reduction of the balance sheet.” And he concluded: “This is an important moment for U.S. economic policy. With the right approach, we can achieve a more stable, more dynamic, and more prosperous economy.”

Independence and balance sheet

For experts at Banca March, however, Kevin Warsh’s appearance unfolded as expected. “Democrats focused their interventions on questioning the candidate’s independence — highlighting the moment when Elizabeth Warren called him a ‘sock puppet’ — while the Republican bloc largely offered its support. Even Republican Thom Tillis expressed his backing, although conditional on the closure of investigations into the current Federal Reserve governor,” they note as the most striking aspect of his appearance.

That said, the main debate for experts is whether this “new phase” will be synonymous with independence. In the view of Laura Torres, chief investment officer at IMB Capital Quant, the market is now operating in a back-and-forth of statements that leaves little definition, high volatility, and uncertainty. “The diplomatic stalemate and the belligerent stance of the Trump administration have created a scenario where complacency is no longer an option. The Fed’s narrative also enters a phase of high volatility with the possible appointment of Warsh, who seems willing to break with the institution’s traditional independence to align it with the fiscal and tariff objectives of President Trump,” Torres criticizes.

From UBS Global Wealth Management, they believe that the Fed remains on track to further reduce interest rates, as cooling inflation and moderating growth should allow the U.S. central bank to act toward the end of this year.

“We maintain the view that the Fed should cut rates by another 50 basis points toward the end of this year. Greater easing should support equities and high-quality bonds in the medium term,” says Mark Haefele, chief investment officer (CIO) at UBS Global Wealth Management.

Regarding the balance sheet situation, Tiffany Wilding warns of the moral hazard arising from the progressive increase in the Fed’s balance sheet as a result of regulatory liquidity requirements in the U.S. financial system: “The growing holdings of Treasury bonds by the Fed needed to satisfy that demand may distort price formation in the market — including Treasury repo funding markets — and reduce liquidity in the public debt market,” Wilding explains.

The other key points

From Oxford Economics, they consider that Warsh will be a more dovish voice within the Federal Open Market Committee, will advocate for an aggressive reduction in the size of the Fed’s balance sheet, and will seek to introduce significant changes in the institution’s communication strategy. However, they recall that the Fed chair cannot make these changes unilaterally, so they expect that Warsh’s need to build consensus will limit the scope of changes in policy or in how the Fed communicates.

“Warsh stated on several occasions that a ‘regime change’ is needed at the Fed. He favors modifying the institution’s current communication strategy and opposes the use of forward guidance as a policy tool, as well as the publication of economic forecasts, which he considers an obstacle to flexibility because members of the Federal Open Market Committee ‘cling to those forecasts longer than they should.’ He also suggested that he might favor reducing the number of FOMC meetings to fewer than eight per year, which is the current schedule; the law requires the committee to meet four times per year. He also did not commit, if confirmed, to holding press conferences after every FOMC meeting, which has been the norm since 2019,” they explain.

Finally, the firm notes that Warsh’s selection “remains in limbo.” According to their forecast, it is expected that the Senate, controlled by the Republican Party, will confirm Warsh if his nomination is approved by the Senate Banking Committee. “However, we expect his candidacy to remain stalled in committee for some time. Senator Thom Tillis of North Carolina made it clear at Tuesday’s hearing that he will not support Warsh’s nomination until the Trump administration’s case against Powell is withdrawn. However, in an interview prior to the hearing, President Trump gave no indication that he would pressure the Department of Justice to drop the case. Given the narrow margin in the committee, the nomination cannot advance without Tillis’s support. This increases the likelihood that Powell will continue as chair beyond May 15, when his term officially ends,” they add.

From J. Safra Sarasin Sustainable AM, they acknowledge that, paradoxically, a delay in his confirmation could work in Warsh’s favor. “With inflation moving in the wrong direction, it is unlikely that the FOMC will cut rates in the short term. A prolonged process would leave Powell bearing the cost of inaction, thus preventing Warsh from having to confront Donald Trump prematurely at the start of his term as chair,” they conclude.

The Global ETF Industry Starts with Record Inflows but Lower Assets Under Management

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Global ETF flows grew by 35% during the first three months of the year, compared with the first quarter of the previous year. According to ETFGI, net inflows of $174.42 billion were recorded in March, bringing total net inflows for the year to a record $626.42 billion.

This means that global ETF assets stood at $20.08 trillion at the end of the first quarter, below the record $21.24 trillion reached in February 2026. “The global ETF industry remains highly concentrated, with iShares, Vanguard, and State Street SPDR ETFs controlling 58.3% of total assets. iShares leads with $5.43 trillion (27.1%), followed by Vanguard with $4.29 trillion (21.4%) and State Street SPDR ETFs with $1.98 trillion (9.9%). The other 991 providers each account for less than 5% of global ETF assets,” highlights Deborah Fuhr, managing partner, founder, and owner of ETFGI.

The destination of flows

According to ETFGI data, first-quarter net inflows, totaling $626.42 billion, are the highest ever recorded, surpassing the previous peak of $463.51 billion in 2025 and $397.51 billion in 2024. March therefore marked the 82nd consecutive month of net inflows into the global ETF industry.

In March, ETFs gathered $174.42 billion in net inflows globally. In terms of asset types, equity ETFs recorded net inflows of $54.12 billion in March, bringing the year-to-date total to $225.64 billion, above the $211.63 billion recorded through March 2025. Meanwhile, fixed income ETFs posted net inflows of $35.44 billion in March, taking the annual total to $119.17 billion, well above the $81.97 billion recorded in the same period of 2025.

Commodity ETFs, for their part, experienced net outflows of $9.83 billion in March; “however, on a year-to-date basis they have recorded net inflows of $16.62 billion, below the $21.91 billion reached through March 2025,” they note. Finally, active ETFs gathered $78.37 billion in March, lifting the annual total to $245.95 billion, significantly higher than the $144.51 billion recorded through March 2025.

The significant inflows can be attributed to the top 20 ETFs by net new assets, which together attracted $94.06 billion in March. “The State Street SPDR Portfolio S&P 500 ETF (SPYM US) alone recorded $16.83 billion,” ETFGI highlights.

Miami Consolidates Itself as the Epicenter of Global Wealth Management Amid Structural Disruptions

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Photo courtesyLuis Arocha (Capital Group); Rocío Harb (IPG); Catherine Lapadula (UBS) and Maribel Maldonado (Merrill Lynch)

In a context of profound transformation in the wealth management business, the panel “Challenges and Opportunities in Wealth Management” brought together international segment leaders in Miami to analyze the forces reshaping the industry, from regulatory pressures to demographic and technological changes.

Moderated by Luis Arocha, Business Development Manager at Capital Group, the panel stood out not only for the level of experience of its participants—Rocío Harb (IPG), Catherine Lapadula (UBS), and Maribel Maldonado (Merrill Lynch), but also for the consensus around a key point: the business is going through a structural, not cyclical, moment.

From the outset, Arocha framed the conversation within a broader trend: the geographic shift of financial power. “Twenty-five years ago, if you wanted to influence global wealth, you went to New York or Wall Street. Today, many of the key conversations about international capital and cross-border wealth are taking place in Miami,” he stated.

A more complex business: regulation, margins, and technological disruption

Catherine Lapadula, Managing Director and Market Executive International at UBS, outlined a challenging landscape marked by multiple simultaneous fronts. “The challenges are not only related to the market. They are structural, regulatory, and generational,” she noted.

From her perspective, increasing global regulatory pressure—with frameworks such as MiFID II, FATCA, or CRS—has significantly raised operational complexity. “International is not a hobby. It’s like pregnancy: you either are or you aren’t,” she warned, emphasizing that compliance will continue to intensify.

This is compounded by margin compression driven by transparency. “Wealth managers have to justify their fees. Price is the only issue in the absence of value,” she stated, highlighting that differentiation will come from service, advice, and tailored solutions.

Lapadula also pointed to the dual impact of technology: “Fintechs and robo-advisors are both an opportunity and a threat,” although she clarified that the ultra-high-net-worth segment will continue to demand highly personalized advice.

The feminization of wealth and generational transition

One of the panel’s most relevant points was the ongoing demographic shift. “For the first time in history, we have what we will call the feminization of wealth,” Lapadula stated. “Trillions of dollars will change hands over the next 10 to 15 years… and a large portion will go to women.”

The implication for the industry is direct: “If you’re not talking to the wife, the girlfriend, or the daughter, you’re missing out,” she warned, noting that communication and approach must adapt to new wealth decision dynamics.

Talent, compliance, and artificial intelligence

Rocío Harb, Director and Branch Manager at IPG, agreed that regulation remains one of the main challenges, especially in an environment of accelerated technological innovation. “The business evolves and regulation increases, and that is always a challenge,” she explained. In particular, she highlighted the integration of artificial intelligence under strict compliance frameworks: “Incorporating AI into our daily routine while continuing to comply with regulations will be a major challenge.”

This is compounded by competition for talent in a market like Miami. “There are wonderful institutions with talented people. For us, the focus is on ‘white-glove’ service and on growing advisors,” she noted.

AI and the risk of losing the human touch

From a more behavioral perspective, Maribel Maldonado, International Wealth Management Advisor at Merrill Lynch, focused on the client relationship in the era of artificial intelligence. “AI is intelligence on demand,” she said, anticipating more informed and demanding clients. However, she warned of a growing risk: “Dependence on AI is leading to a lack of personal touch.”

In this sense, she emphasized that the advisor’s value is not diluted but redefined: “Nothing is more important to clients than being able to trust you to help them interpret all these changes.”

Miami: from emerging market to structural capital hub

One of the clearest points of consensus was Miami’s role as a new nerve center for international wealth management. Maldonado traced the city’s historical evolution: “Miami went from being a small enclave to a global cosmopolitan center,” and projected that “it will be one of the 20 richest cities in the world in the not-too-distant future.”

Lapadula went further by describing a structural shift: “Miami is not just a trendy city. It is a reorganization of capital. Capital lives here, is managed here, and is capitalized here.”

This phenomenon responds to a “flywheel effect,” she explained: the arrival of wealth drives real estate investment, which attracts more capital and, in turn, wealth managers. “For the first time, firms are coming to where the clients are,” she noted.

Alternatives: from niche to structural component

In terms of investment, the panel highlighted the growth of alternative assets as a key differentiator. Harb explained that IPG bet early on this trend: “Our clients needed something beyond the 60/40 portfolio,” which led to the development of proprietary solutions such as IPG ALTS.

Maldonado reinforced the idea from a structural perspective: “In the United States, there are 200,000 companies and only 5,000 are publicly listed,” making the integration of private markets increasingly logical. She also emphasized the democratization of access: “Minimums have dropped considerably… we are going to see a clear movement in that direction.”

From UBS, Lapadula proposed a balanced “barbell” approach, combining real assets, high-quality fixed income, and private markets, with an emphasis on liquidity in a more volatile environment.

Work-life balance: an evolving challenge

The panel closed by addressing a cross-cutting issue: the balance between personal and professional life, especially in a historically demanding industry. Harb was direct: “Do we really balance? Maybe not,” acknowledging personal sacrifices, especially in early stages.

Lapadula summarized her approach in one phrase: “I delegate tasks, not time,” prioritizing key moments both personally and professionally.

For her part, Maldonado proposed a pragmatic formula based on three decisions: “Deal with it, Delegate it, or Discard it,” also highlighting that technology has expanded the possibilities for balance. The final consensus pointed to a broader cultural shift, where family and work dynamics are evolving toward a more collaborative model. “It’s a team sport,” Lapadula concluded.

Juan Alcaraz Dies, Founder of Allfunds and Key Figure in the Transformation of Global Fund Distribution

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Juan Alcaraz founder of Allfunds
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Allfunds has announced with deep sorrow the passing of Juan Alcaraz, founder of the company and Chief Executive Officer for more than twenty years, whose strategic vision was instrumental in establishing the firm as the leading global fund distribution platform.

Alcaraz founded Allfunds more than twenty-five years ago and led its international expansion during a period marked by innovation, sustained growth, and the consolidation of the group as a key player within the wealth management industry. His leadership transformed the company into a global benchmark in the financial sector and in wealth management.

The company highlights his foresight, his commitment to business development, and his constant enthusiasm for driving new growth opportunities. His role was decisive in building an organization with a global presence and a leadership position within the fund distribution market.

Beyond his business career, Juan Alcaraz was recognized for his vocation for service, his approachability, and his commitment to the professional development of those who worked alongside him. His dedication to talent and the training of new professionals left a deep mark within the organization.

Likewise, Allfunds has underscored his involvement in promoting the company’s philanthropic culture. His continued support for charitable initiatives and his interest in strengthening corporate social responsibility were an essential part of his legacy, an area that, according to the firm, brought him particular enthusiasm and pride.

The Board of Directors, the management team, and all Allfunds employees have extended their condolences to the family of Juan Alcaraz, as well as to all those who shared in his professional and personal journey. The company thus bids farewell to one of the most influential figures in its history and one of the main drivers behind the evolution of fund distribution at an international level.

Chile and Argentina: Two Examples of How to Connect LatAm and Luxembourg

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ETF adoption relevance
Photo courtesyFelipe Díaz Toro (EDN Abogados), Beltran de Ramon Acevedo (Comisión para el Mercado Financiero (CMF)), Camila Guzman Novak, CFA (LarrainVial Asset Management), and Mauricio Larraín Errázuriz (Universidad de los Andes - Colombia, Chile)

The assets of Latin American pension funds are becoming increasingly large, but also more international. Some significant data reflecting the scale of this opportunity can be found, for example, in Mexico, where foreign securities represented approximately 15% of the total assets of Afores, which reached $488 billion at the end of 2025.

Even more relevant are the figures from Colombia, where approximately 49% of the assets of mandatory pension portfolios were invested abroad last year; and those from Chile, a country in which 51.7% of the assets of its pension funds are invested abroad; this implies approximately $123.7 billion overseas and $115.6 billion in the domestic market.

This growth translates into a business opportunity for Latin American firms, which clearly see the value in having strong access to UCITS products or even launching vehicles domiciled in Europe. But it is also an opportunity for European firms, which see a way to bring international investors closer to investing in the Latin American local market.

“We see greater demand from pension funds to invest abroad, with the Luxembourg jurisdiction attracting the most interest; and this is a trend that extends across the entire region. This type of institutional investor considers Luxembourg a solid hub, with stable, transparent legislation that is connected to the rest of the world,” recently highlighted Felipe Díaz Toro, Managing Partner at EDN Abogados, during an event organized by the Association of the Luxembourg Fund Industry (Alfi, by its English acronym).

Chile, a bet on modernization

For experts, Chile is a clear example of this trend. On the one hand, it is worth noting that its fund industry has undergone a very significant transformation which, in Díaz’s view, is driving capital markets toward clear modernization and internationalization. “We have a new government, a very professional business environment, and a highly ambitious agenda. The current pension reform will allow for an increase in assets and in the range of investable assets, with a particular focus on private markets. On the other hand, we see that Chilean firms are internationalizing their strategies, thinking not only about local players, but also about European and global players,” explained Díaz.

As a result, Chile already has a significant onshore fund industry, with alternative investments at its core: $37.9 billion in public investment funds (March 2025); and $7.2 billion in assets under management in private investment funds (June 2024), with 27% in private equity, 26% in real estate, and 17% in private debt.

According to Díaz, this new phase generates very interesting business opportunities between Chile and the Luxembourg fund ecosystem: “Opportunities for collaboration are opening up in the presence of Chilean capital in global markets; and also for capital from the rest of the world in the Chilean market. In the first case—when pension funds want to invest in global activities or vehicles—there is increasing use of platforms structured in Luxembourg and UCITS vehicles. In the second case, European structures can provide access to participate in the development of the Chilean market, alongside local agents with all the expertise that entails,” he argued.

The clearest example of this two-way trend is the business of LarrainVial Asset Management. As explained by Camila Guzmán, Portfolio Manager LatAm Equities at the firm, who also participated in the same Alfi event, the shift in the Chilean industry toward managing invested assets locally has built a strong sector with high standards; “now we need vehicles to invest abroad, and Luxembourg has them.”

Currently, its structure in Luxembourg is fairly standard among Latin American asset managers seeking international distribution, as it combines UCITS vehicles domiciled in Luxembourg with delegated functions and a global distribution platform. “We came to this hub because pension funds have very high standards, and here they matched their requirements. We had to ‘climb’ a great mountain at the beginning, but once you achieve it, you obtain this important structure that allows you to compete globally. It was very interesting, because when we had the opportunity to reach offshore institutional investors, that was when we left Chile and tried to diversify our client base. It was a major effort. We began coming to Luxembourg to meet foreign investors in 2016, and at first they were not very receptive to talking about Chile, but this has been changing. Now, the perception is that we are dealing with a relevant country within the global emerging markets universe,” she noted.

She added: “In recent years, we have seen more investments coming from global emerging market funds, and they have done so with more regional managers. That is where we come in as well. We are now one of the largest players in Latin American equities globally, thanks to pension funds, but also to the standards that are established.”

Argentina: potential to be developed

Within the region, Argentina’s fund industry also stands out. As explained by Valentin Galardi, president of the Argentine Chamber of Mutual Funds (CAFCI), the sector faces significant changes that, following Chile’s example, aim to modernize it and open it up to international capital and trust. “For us, it was unimaginable to be in Luxembourg presenting the possibility that 14 funds could be an option for Argentine investors, especially considering that our Mutual Fund Law was created in 1962. However, in 2024 the fund industry in Argentina (mutual funds, FCI) experienced relevant changes in three areas: asset growth, product transformation, and regulatory adjustments linked to the new macroeconomic context,” Galardi shared during his participation in the Alfi event.

In his view, one of the key indicators of where Argentina’s fund industry is heading is the creation of new categories, both of funds and investors. “On the one hand, a new category of funds has been introduced—FCIs for qualified investors—which have fewer investment limits and can invest in more complex assets, international markets, and less liquid structures. Secondly, a new category of funds with international exposure has been created through registered local FCIs, opening an international gateway,” Galardi highlighted as the main changes.

Galardi remains optimistic and confident in the steps the industry is taking, particularly the regulator, toward greater openness. “We have 22 million investors ahead of us; it is a great responsibility.”

Fiscal Policy, Public Debt, and Yield: The Pending Debates in the Fixed Income Market

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Principal Latin America institutional clients
Photo courtesyMarco Giordano, Investment Director at Wellington Management

In the view of Marco Giordano, Investment Director at Wellington Management, much has been said about monetary policy and little about fiscal policy. In his opinion, the shift in focus is key: “We are at a moment when, unless we experience an oil shock, major central banks are more focused on narrative than on action. By contrast, fiscal policy is going to be much more active. We will enter a phase in which we must understand the fiscal policies of different countries in order to understand the fixed income market and monetary policy.”

In the current context marked by geopolitics and the conflict between the U.S. and Iran—with rising oil and gas prices as the main consequence in markets—for Giordano, the real inflation risk lies in the potential reaction of governments to an inflationary shock. “Right now, it is the price of oil that could lead us into an inflationary shock, but for me what matters is the impact of the measures countries take in response to such a shock. That is, a repeat of what we saw in 2022, with governments approving large-scale measures without specific targets and increased public debt issuance, in the face of inflation above 2%,” he explains. In this regard, the Investment Director at Wellington Management believes that investors are not taking this interpretation of inflation into account and are not preparing their portfolios.

Public Debt: Where to Issue on the Curve

According to his analysis, this increase in public deficit has coincided with significant deleveraging by households and companies, which has greatly changed opportunities in the fixed income market. “In terms of public debt, it is true that there is potential differentiation between countries. And this is happening at a time when, as long as inflation remains around 2%, it will be difficult for central banks to intervene and absorb that debt. However, the most interesting question is the next step: at what point will markets demand an adjustment in public spending, and how will they do so? For me, this is the elephant in the room for the fixed income market,” says Giordano.

In this regard, the Investment Director at Wellington Management points directly to the U.S. In his view, the country has a structurally very high deficit—consistent with a period of negative growth—at the end of the current economic cycle, which has been very long. “I would say this is possible for several reasons, but the main one is that the United States always plays by different rules because its currency is the global reserve, so there is always persistent demand for dollar-denominated assets. Proof of this is that, for now, markets continue to absorb U.S. Treasury issuance,” he notes.

One trend observed by Giordano is that governments are becoming aware of investor demand for issuance at different points along the yield curve and are adjusting their issuance accordingly. “Although we are seeing structurally higher issuance by governments, the reality is that they are adapting their issuance so that its impact is lower, and they are also seeking other pools of capital to absorb that issuance. This trend represents an opportunity for investors because it implies significant potential differentiation between countries. Until recently, there was not as much polarity or differentiation between issuers, whether in public debt or credit debt; but now, with higher interest rates, there is increasing differentiation between issuances,” he explains.

Credit: Sustained Demand for Yield

In his view, as a result of rising sovereign yields, credit market spreads have tightened; however, demand for credit—both high yield and investment grade—has been considerable. In his opinion, this is not complacency but rather persistent demand for yield. “Many portfolios globally have been underweight fixed income, so they have seen credit as a good entry point given its attractive valuations, across all types of investors, whether institutional, retail, domestic, or international,” he explains.

Although he acknowledges that in the current environment there is some “vulnerability to potential exogenous shocks,” he believes that possible corrections in the credit market are more related to a process of “adjustment” toward more normalized levels. At the same time, he argues that we are beginning to see greater dispersion across sectors: “If we look at the MOVE index (Merrill Lynch Option Volatility Estimate) in 2025, we see that there has been less and less volatility in fixed income markets, which is somewhat counterintuitive. With more geopolitical and macro noise and volatility, there should be more market volatility, yet in 2025 it has been somewhat the opposite. However, from January, and more strongly in February, we began to see greater dispersion across sectors and issuers, generating new opportunities for investors.”

In his review of fixed income, Giordano offers a final message: “Fixed income has returned to portfolios, but in a completely different environment, where the 60/40 portfolio no longer works and where we are seeing greater presence of other assets, such as digital assets or private markets.” Despite this new context, Giordano believes that fixed income remains a key asset for navigating uncertainty. “It is clear to everyone that portfolios must be diversified, but what matters here is that the wide range of assets offered by fixed income allows for income generation while also protecting capital,” he concludes.

Franklin Templeton Strengthens Its Capabilities for the Offshore Market

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Photo courtesyJoseph Arrieta, Senior Sales Executive, and Angelita Fuentes, Internal Wholesaler at Franklin Templeton

Franklin Templeton has announced the appointment of Joseph Arrieta as Senior Sales Executive (External Wholesaler) for the Northeastern territory, and Angelita Fuentes as Internal Wholesaler in Miami, with immediate effect. Both will report to Marcus Vinicius, Head of US Offshore, as part of the firm’s strategic reinforcement in this segment.

These additions underscore the firm’s commitment to expanding its presence in the U.S. offshore business, one of its main drivers of global growth. This segment has become a key strategic pillar, serving an increasingly diverse and sophisticated international client base through a cross-border model that connects investors with global opportunities.

In his new role, Arrieta, based in New York, will be responsible for leading offshore coverage of the Northeastern United States territory, including key financial centers such as New York, Boston, Chicago, and Toronto. He will work closely with Jack Leung, Internal Wholesaler, based in Florida. The professional has more than eight years of experience in wholesaling, with a track record across domestic, intermediary, and offshore channels.

For her part, Fuentes joins as Internal Wholesaler in Miami, where she will collaborate with Dolores Ayarra, Senior Sales Executive, and Rafael Galíndez, VP, Sales Executive. From this position, she will support the coverage of banks, wire houses, and independent advisors in key markets such as Florida, Texas, San Diego, and Arizona.

“The U.S. offshore market is a strategic priority for Franklin Templeton and a key driver of our future growth. As clients seek to consolidate relationships with a smaller number of partners capable of offering comprehensive solutions across all asset classes, we continue to invest in talent and capabilities,” said Marcus Vinicius.

Prior to joining, Arrieta developed much of his career in the offshore segment, including his time at Voya Investment Management following the alliance with Allianz Global Investors, where he covered private banks and independent channels in the U.S. and Puerto Rico. Previously, he worked at Allianz Global Investors, expanding his coverage from the United States to Latin America, and at firms such as Oaktree Capital and Hudson Edge Investment Partners.

Fuentes brings more than 20 years of experience in wealth management, banking, and international markets. She joins from Voya Investment Management, where she focused on the offshore business. Previously, she held roles as VP and financial advisor at Investment Placement Group and built a long career at Truist Bank, where she worked with high-net-worth Latin American clients. She also has international experience in the real estate sector in Belize.

For Javier Villegas, Head of Iberia and Latin America at Franklin Templeton, “the addition of Joseph and Angelita significantly strengthens our team. Their experience and deep understanding of the offshore environment will be key to strengthening client relationships and continuing to drive growth in the region.”

With these appointments, Franklin Templeton continues to advance its global strategy of strengthening its Global Client Group, aligning resources and capabilities to provide a more integrated, efficient, and client-focused service across public and private markets.

Three Forces, One Destination: The Complexity of Today’s Fixed Income

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Pilar Gómez-Bravo, co-CIO de Renta Fija de MFS Investment Management
Photo courtesy

Global fixed income is going through an extraordinary period due to the simultaneity of reinforcing factors: an energy shock that has yet to stabilize, stickier-than-expected inflation, and private credit that has grown faster than the system can absorb. That is the diagnosis presented by Pilar Gómez-Bravo, Co-CIO of Fixed Income at MFS Investment Management, at a meeting with investors in Miami.

The executive shared a document titled “The Three Body Problem: A Pragmatic Approach to Investing in 2026,” which describes an environment of persistent volatility and rising risks. “Central banks, which were expected to diverge, are no longer going to do so. Basically, they are not going to do anything. And hopefully they won’t, because if they do, they could break the balance,” she explained.

The market environment, then, is marked by a common denominator: three forces colliding at the same time, generating a pattern of instability that is difficult to anticipate.

Energy: the shock that moves faster than monetary policy

The energy component is the most immediate and the most political. Gómez-Bravo reviewed the historical record: shocks of 139% during the invasion of Kuwait, 58% after the war in Ukraine, 28% in Syria, and a recent 79% linked to the escalation with Iran. While these episodes “tend to be short-lived,” their effects on inflation are immediate.

The sensitivity of the global market, she explained, is concentrated in a few geographies: Asia receives nearly 90% of the crude that flows through the Strait of Hormuz, and Europe remains highly dependent on gas. A prolonged shutdown would have uneven but profound consequences. “Trump may control the narrative, but Iran controls the physical supply of oil. If there is no physical supply, every day counts and it is difficult to control prices,” she emphasized.

The risk, she said, is that a supply shock derived from the conflict ends up turning into a growth shock. “If this lasts beyond four weeks, markets will begin to price in growth problems, not just inflation,” she warned.

Inflation: a much less linear slowdown

The second vertex is inflation persistence. Although some data show improvement, the pace of adjustment remains slow. In the United States, the short end of the curve is the only segment anticipating a stronger impact from the conflict, while the long end remains anchored.

The MFS expert’s presentation highlights that fiscal policy continues to be expansionary, with high deficits across all major developed economies. This is compounded by an unprecedented wave of corporate capex, driven by the artificial intelligence ecosystem and major digital infrastructure providers.

This massive investment push also has financial implications. Gómez-Bravo put it bluntly: “The problem arises the day they fail to meet earnings expectations and have to refinance all that debt.” She added a reflection that summarizes her view: “Why should I finance AI companies? Let shareholders do it—they are the ones who receive the upside.”

Today, she explained, the market is still absorbing record issuance without difficulty: hyperscalers could reach $400 billion in new debt this year, approximately half of net investment-grade supply. But the challenge lies not in the present, but in sustainability: “Today there is no problem—there is capacity to absorb all AI supply—but in two or three years there could be a financing problem.”

Private credit: rapid growth and early signs of stress

The third body in collision is private credit, whose growth has been so rapid that it is beginning to generate its own side effects. Global banks have increasing exposure to non-depository financial institutions, and several markets are showing patterns previously seen ahead of periods of stress.

Gómez-Bravo was clear in quantifying the risk: “If the default rate in private credit rises from 4% to 8%, and you only recover 50%, all illiquidity premiums disappear.” This potential deterioration coexists with other concerning factors:

  • Easing of underwriting standards.
  • Growth in PIK toggle structures, which capitalize interest instead of paying it.
  • Increasing risk among private brokers financing hedge funds with leverage.
  • 5% redemption limits in retail funds, which can amplify mass outflows.

Three lenses to analyze the cycle

The MFS presentation emphasized that current analysis must rely on three simultaneous pillars—fundamentals, valuations, and technicals—because none on its own provides a complete picture.

  • Fundamentals: it is not just about inflation—it is fiscal policy, energy, and a credit constraint that “is already tightening financial conditions.” As Gómez-Bravo summarized: “It is the market that is doing the Fed’s job.”
  • Valuations: spreads remain extremely tight relative to history, even after recent widening. For the firm, discipline is therefore key: defining clear thresholds. In Gómez-Bravo’s words: “Remember those thresholds to think about when to start adding risk… and thus maintain discipline.”
  • Technicals: positioning is cautious, albeit heterogeneous. Dispersion remains contained, making security selection more relevant.

Where to look? The pragmatic approach of MFS

MFS’s strategy for the coming months combines flexibility with prudence:

  • Neutral to slightly long duration in some markets.
  • Tactical exposure in Brazil, Uruguay, Peru, Korea, and South Africa.
  • Hedging of Latin American currencies “because they are the first to suffer.”
  • Underweight in technology, except for specific names.
  • Ongoing evaluation of opportunities in BDCs and industrial sectors with strong fundamentals.

“The advantage and disadvantage of fixed income is that it is mathematics: in the long term, if there are no defaults, yield is what you get,” the asset manager stated during her remarks. And a warning for investors seeking simplification: “This is a market for active managers, not for passive strategies that depend on stable trends.”

The three-body problem

The metaphor that gives the report its name is no coincidence. The system described by Gómez-Bravo—energy, inflation, private credit—functions like a three-body system: each movement affects the others, and the equilibrium is inherently unstable. The MFS manager summarizes it this way: “We are not facing independent shocks, but rather a dynamic system where moving one piece disrupts the rest.”

Nothing happening today appears definitive. Inflation is not yet defeated, private credit has not fully revealed its true risk profile, and the energy shock has not reached its floor. The underlying message—implicit throughout the Miami event—is to combine rigorous analysis with the ability to react: to understand that apparent stability is just that—apparent. And that as long as these three bodies continue to move, the investor’s task will be to navigate their dynamics without losing sight of the whole.