About Eric Veiel
In April 2024, Eric Veiel stated that T. Rowe Price's asset allocation committee was "dramatically neutral" between stocks and bonds, describing the position as "not the most exciting fodder" but reflecting their current outlook. He said there had "without a doubt" been a post-pandemic regime shift, and that at higher interest rates the environment was "much more of a bottoms up world" rather than a simple chase of risk assets.
Veiel noted that within equity portfolios, T. Rowe Price was overweight energy and health care, relatively neutral in tech, and had reduced some exposure from financials and industrials. He described commodities as "interesting" and said the firm's allocation portfolios included a real assets sleeve that provided "strong diversification from inflation." On the Federal Reserve, Veiel said he could not know what was in Chair Powell's head but that the inflation numbers "have to give you some pause."
Source: AI-verified profile updated from Eric Veiel's recent appearances.
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Transcript (12 segments)
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Interviewer0:12
Avoid bonds at all costs? Because right now it's not clear that this FOMC has the conviction to really make the right call and not have a policy error.
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Eric Veiel0:23
Well, I wouldn't go that extreme. As we've unfortunately or fortunately said, we're poor right now in our asset allocation committee. We're actually dramatically neutral is the phrase that we've been using between stocks and bonds, which is not the most exciting fodder for the media, but that's where we are. I do think commodities were really interesting. Within our equity portfolios, we're overweight energy in the vast majority of those in different ways. We think there are some really interesting opportunities there coming from our bottoms-up work.
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Interviewer0:50
Going back to Powell, a student of the seventies. Does the commodity pressure, the increase we've seen, unnerve him?
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Eric Veiel1:11
Right, just as a reasonable place to be.
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Interviewer1:14
If you were him, what would you do?
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Eric Veiel1:16
I think you have to look at the data. If you think we have seen a regime shift post-pandemic versus pre-pandemic, and if you do, how is investing in the next decade or so going to change relative to the previous decade? Without a doubt, we have seen a regime shift post-pandemic. The issue is all about the absolute low rates that we had heading into the pandemic, where it was much more about the macro. It was much more about all things up in a zero environment. Risk assets on. In this environment, at higher levels, you have to be more... it's much more of a bottoms-up world from our perspective. It's not as easy as just a chase.
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Interviewer1:50
Well, let's get into that because it feels like everything is up yet so far this year. What shouldn't be up?
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Eric Veiel1:55
An interesting question. We're relatively neutral in tech, and we've taken some of that from areas like financials and a little bit in industrials where we're a little bit more neutral position.
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Interviewer2:23
There's a question here about whether 60/40 works in a new era, or inflation's a bigger risk than stagnation or recession. How much are you shifting away from that with the idea of commodities being more of a ballast than bonds?
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Eric Veiel2:38
We still believe that there can be some benefit from diversification within bonds, for sure. We've also had a strong view that having a real assets sleeve within your portfolio matters and helps and provides really strong diversification from inflation in a way that many of our peers don't do in their allocation portfolios.
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Interviewer3:12
Be able to clip coupons, but also with more robust market activity, collect those fees as well?
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Eric Veiel3:19
Yeah. So what matters is the relative valuation of that group. I think what you just said is right, and part of that's already been factored in. Banks had a nice little pop, and we were in there, and now we're taking some of that back.
