Wealth managers show more than a decade-high positive sentiment towards bonds after a tumultuous 2022, the latest Asset Risk Consultants (ARC) survey revealed.
The research showed a 12-month positive change in sentiment towards the bond sector, up to 53% from 2% at the beginning of 2022 and the highest since 2009.
Graham Harrison, chairman at ARC, says: “For the first time in over a decade that investors need to be paying close attention to the amount of money they invest in bonds alongside the shares they hold in companies. For more than ten years investing in bonds has given very little yield or interest income — this has now changed. Bonds are back and subsequently, so is the traditional balanced portfolio.”
ARC indicated that the financial repression of bonds delivering negative real returns might end once the inflation spike lowers.
The investor sentiment survey further indicated positive sentiments of investors in the healthcare and energy sector and negative sentiments towards private equity and commercial property.
The year 2022 has been one of economic uncertainty, with falls in almost all asset classes, but “uncertainty also creates opportunity”, said Harrison. Considering the improving equity valuation and real bond yields, “there is hope that 2023 will be a better year for investors”, he remarked.
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