Managers make biggest move to bonds in over a decade
The monthly Bank of America Global Fund Manager Survey has found a net 90% of respondents expected inflation would fall in the next 12 months.
Looking specifically at the US, they expected US CPI inflation would be 4.2% in the next 12 months which was down from its current rate of 7.1%.
While high inflation was still the largest tail risk to markets for the sixth consecutive month, it was cited by only 37% of respondents.
Allocations to bonds “surged” during the month, Bank of America said, with investors now at a 10% overweight, the first time they had held an overweight since April 2009. This was up 29 percentage points on November.
Just over a quarter (27%) said they expected government bonds to be the best-performing asset class of 2023, followed by equities at 25% and corporate bonds at 24%.
This allocation to bonds came at the expense of allocation to industrials, cash and energy.
Respondents took their cash levels to 5.9%, down from an ‘uber bearish’ rate of 6.2% in November, as risk sentiment started to ease. The long-term average for cash weightings was 4.8%.
Over 300 global fund managers were surveyed between 2-8 December with US$815 billion in assets under management.
AUTHOR
Laura Dew
Recommended for you
Amid a growing appetite for alternatives, investment executives have shared questions advisers should consider when selecting a private markets product compared to their listed counterparts.
Chief executive Maria Lykouras is set to exit JBWere as the bank confirms it is “evolving” its operations for high-net-worth clients.
Bennelong Funds Management chief executive John Burke has told Money Management that the firm is seeking to invest in boutiques in two specific asset classes as it identifies gaps in its product range.
Responsible investment performance concerns have lessened as the market hits $1.6 trillion in AUM, according to RIAA’s annual report, but greenwashing fears among asset managers are on the rise.
