Bank of America may sell its 34 percent stakein the world's largest asset-management firm Blackrock.
Mark Lennihan
BlackRock's headquarters in New York.
From Bank of America's perspective, this is very consistent with CEO Brian Moynihan's overall message to "slim down the firm to the core assets that he wants to own: consumer, wealth management and investment banking," Charles Kantor, portfolio manager at Neuberger Berman, told CNBC's "The Strategy Session"on Monday.
Back in 2009 Bank of America acquired it stake in Blackrock through its takeover of Merrill Lynch. Since that time, there has been friction between Blackrock and Bank of America, according to people familiar with the matter.
Kantor believes that riskier assets, such as high-yield and equities, would turn out to do best this year. So far he's been half right, with high yield issurance at record levels, up almost double digits, yet equities are down.
"Ultimately the fixed-income guys always look at the world as glass half-empty not glass half-full. The credit markets should beat the equities markets out," he said, adding, "because the asset classes are so closely linked."
If you look at the two asset classes independently "high-yield is still attractive because if you look at the coupon"—ranging between 6.5 to 7.5 percent—versus close to zero(2.5 percent on the 10-year US Treasury bond). That's a 5.5 point spread that's already priced into the market," he said.
For a high-yield market we do not need a robust economy. "If the credit markets stay healthy, the markets should remain healthy, equities will catch up," Kantor concluded.
- BofA Considers Reducing Blackrock Stake: Report
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