For Kristy Akullian, an interest in economics during college was motivated by a need to learn about personal finance in order to make budget each month with student loans and other expenses. After a short stint at a boutique RIA, she joined the iShares division within BlackRock, where she is now a Senior Strategist supporting the firm’s clients on asset allocation.

Our conversation explores the development of ETF technology over the years and Kristy’s time as part of the delta one initiative in expanding the universe of investors in the product. Here we learn about her desire to be “in the weeds” on margin, clearing, taxes, dividends and funding in access products that enable synthetic replication.

We spend the balance of the conversation exploring Kristy’s role as Senior Investment Strategist and the analysis of flows and positioning that constitutes a portion of her framework. She sees extended positioning in futures contracts on broad indices like the S&P and NDX as a reason for caution. She notes, however, that investors are sitting on a tremendous amount of cash, given the much higher short rate of around 5% leaving a higher hurdle for taking on incremental risk.

With respect to the path for inflation, while she sees normalization occurring, there is a risk that the cuts implied by the yield curve do not ultimately materialize, putting more pressure on growth and leaving the potential for an accident. We finish the discussion with Kristy sharing some of her views on the state of progress on initiatives designed to expand opportunities for females in the field of finance. Here she states that it is important to think of women as investors and the work that BlackRock is doing to create model portfolios specific to unique circumstances encountered by females.

I hope you enjoy this episode of the Alpha Exchange, my conversation with Kristy Akullian.

Morning Joe 1/17/24