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BlackRock's Turnill sees greater role for bonds as economic cycle matures

FILE PHOTO: A sign for BlackRock Inc hangs above their building in New York U.S., July 16, 2018. REUTERS/Lucas Jackson

(Reuters) - BlackRock’s global chief investment strategist said on Wednesday he saw bonds playing a greater role in diversifying a portfolio as a maturing economic cycle makes “risk-off” episodes in world markets more frequent.

Government bond markets in major economies such as the United States, Japan and Europe have benefited in the past two months from a view that economic growth is slowing and central banks will have to pause any plans for interest rate hikes.

BlackRock’s Richard Turnill told clients in a weekly note he believed equities could post positive returns this year but added: “We also see a growing role for bonds as portfolio diversifiers as the maturing cycle brings the potential for more frequent risk-off episodes.”

Reporting by Dhara Ranasinghe; Editing by Sujata Rao

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