Institutional investors think active fixed income fund managers can add value to portfolios during the current market volatility, according to research.
The research from London-based credit-focused investment company Aeon Investments, with pension funds, insurance asset managers, family offices and wealth managers, found that one-quarter “strongly agree” and 74% “slightly agree” that fund managers can increasingly add value through sector rotation to exploit valuation anomalies/mispricing or market catalysts for short-term returns.
The majority of respondents said they expect these opportunities to increase over the next two years, with 22% saying there will be “dramatic increases” and 59% predicting “slight increases” in the chance to add value.
19% of investors shared that the situation will remain the same over the next two years. Investors also believe there are a growing number of opportunities in the credit/fixed income market based on the “highest conviction ideas, contrarian themes and dislocation opportunities”. 14% said these opportunities will increase “dramatically” over the next three years and 73% say they will increase slightly. About 13% of respondents said they would stay the same.
