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Even as the stock market enjoyed a sharp rally recently, many of BlackRock’s clients were under-invested in equities and remained heavily oriented toward fixed-income securities, BlackRock Inc. chief executive Larry Fink said on Wednesday.

“Investor risk is not where I would say overzealous into equities,” Mr. Fink said in an interview with Reuters.

“We still don’t see extreme positioning by clients in equities,” Mr. Fink said.

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A thawing in U.S.-China trade tensions during the fourth quarter supported global equity markets, especially U.S. stocks. The benchmark S&P 500 index climbed 8.5 per cent during the period, taking the year’s surge to 29 per cent.

The rapid rally in stocks had led some market participants to wonder if investors have turned too bullish on stocks.

A recent report by Deutsche Bank highlighted how investors, betting on a bounce in global growth, now have the greatest exposure to equities in two years. The report noted similarly extended positioning a month before a sharp reversal in February, 2018.

Fears of a global slowdown have moderated through 2019 and investors have started to take on risk, Mr. Fink said.

“There is quite a bit of momentum going into 2020 in terms of investor appetite,” he said.

Concerns regarding trade have probably moderated and investors are likely to be focused more on the impending U.S. presidential election, said Mr. Fink, who is often quoted for his views on the markets and corporate governance and has been listed among the world’s best CEOs by Barron’s.

The long-running U.S.-China trade dispute is expected to enter a new, quieter phase as U.S. President Donald Trump and Chinese Vice-Premier Liu He are set to sign an initial trade deal later on Wednesday.

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“We still don’t know exactly what that means,” Mr. Fink said.

“But I don’t believe trade will be as big of a headline in 2020 as it was in 2019,” he said.

BlackRock, the world’s largest asset manager, beat analysts’ estimates for quarterly profit on Wednesday and its overall assets under management rose to a record US$7.43-trillion.

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