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Investors’ outlook on bonds improves amid volatility

Bonds have seen a positive shift among investors in the final quarter of 2018 as volatility began to bite.

The number of investor, who saw government and corporate bonds as overvalued dropped in the last quarter, according the the CFA UK Quarterly Valuations Index.

Sixty-one per cent of investors thought bonds were overvalued, compared to 67 per cent in the previous quarter.

Similarly, fewer investors thought that government bonds were “very overvalued” – 16 per cent compared to 24 per cent in the previous quarter.

More than half of the respondents (52 per cent) saw emerging market equities as overvalued, following recent under performance.

Gold remained a safe haven in the eyes of the polled investors. Eighty-six percent of investors said they perceived gold as either fairly valued or undervalued – the highest proportion since the Valuations Index was launched in Q1 2012.

The results of the latest index collated in December were based on asset values in late November.

CFA UK chief executive Will Goodhart says: “We have been experiencing rising market volatility in the last two quarters and, given this, it is understandable that we are seeing trends towards bearishness and de-risking among investors at the moment.

“Our members’ perceptions of bonds have improved and there have only been minor changes in investor sentiment towards equities and gold.”

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  1. Interesting article.
    Grammer needs checking, but thank you.

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