Aeon Investments’ research has shown that 84% of institutional fixed income investors plan to increase their risk levels in the next year, with 10% making significant jumps, driven by a pursuit of higher returns through overseas investments.
The study, conducted among pension funds, insurance asset managers, family offices and wealth managers overseeing around $544 billion collectively, indicated that 15% will maintain current risk levels, while 1% will make significant reductions.
When asked to assess the credit/fixed income allocation of the funds they manage in terms of their local country market, approximately 36% said they believe their allocation is appropriate, while 8% consider themselves very overweight, and 5% very underweight.
Looking ahead, 88% shared that they anticipate a more global allocation to fixed income in the next three years, with 35% planning a dramatic increase in overseas markets. Meanwhile, 12% plan to maintain current allocations.
Regarding liquidity budgets, 20% find their credit and fixed income investments very well aligned, 50% say they are quite well aligned, while 24% note more significant illiquidity, and 6% slightly more illiquidity compared to their funds’ budgets.
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