BlackRock backs US equities

"We love equities, we love dividend stocks," chief executive Laurence Fink said in Hong Kong yesterday.

"You own Treasuries because you're worried about the world and the future, but if you believe the world is a good place to invest for the long cycle, you have to be in equities."

Mr Fink co-founded BlackRock in 1988 and built the company through acquisitions. BlackRock advised the Federal Reserve on illiquid debt portfolios at the height of the financial crisis.

Mr Fink said that he was a "big buyer" of the US dollar, didn't see a bear market in bonds and would buy Treasuries if yields rose above 4 per cent.

"If you just could get a 4 per cent growth in equity markets and a 3.5 per cent dividend, you're earning 7.5 per cent, basically approaching what your liabilities are," Mr Fink said. "Global liabilities are anywhere from 7.5 per cent to 8 per cent and you can't earn your liabilities earning 3.5 per cent in 10-year Treasuries."

Pacific Investment Management Co managing director Bill Gross is also increasing his bet against US government debt Pimco's $US241 billion total return fund had minus 4 per cent of its assets in government and related debt at the end of April, compared with minus 3 per cent in March.

Mr Fink said BlackRock had "huge plans" to increase its hold in Asia.

"Asia is one of our key growth elements over the next three to four years," he said. "We've made a strong living through the exportation of dollar-based assets here to Asia. I believe our future will be much more towards the managing of local-currency products."

As policymakers in Beijing curb lending, "more Chinese companies are going to the corporate bond market. We'll to be the beneficiary as those markets grow," Mr Fink said.