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
Funds managers are being urged by financial advisers to improve their “outdated” education and communication about alternative funds as they actively target them towards retail clients.
GAM Investments has appointed Eric Finnell as its managing director for Australia after his predecessor left to take up the CEO role at Global X.
Fidelity International has looked internally to appoint a head of strategic sales and solutions for its Australian division, which is a newly created role for the business.
Global investment manager Barings has launched two private credit funds for Australian investors as advisers indicate an expectation of increasing allocations to private markets.
