Sixty-two per cent of institutional investors are expected to reduce their exposure to fixed income during 2022, according to new research from Aeon Investments.

One hundred institutional investors across the UK, USA, Germany, Italy, Norway, Denmark, Finland, Sweden, and Switzerland were surveyed, and just 11% said they expect institutional investors to increase their exposure to fixed income.

Global bond markets have suffered significant losses in recent months, and with rising inflation and interest rates expected to increase, 43% of those surveyed expect performance to deteriorate further over the next 12 months, with 13% expecting a significant decline. Just 28% believe performance in the fixed income market will improve.

Aeon Investments CEO Oumar Diallo said: “The fixed income market has endured a difficult time, and the current macro-environment points to continued struggles for large parts of the market.

“Many investors are reallocating to other asset classes, especially those that provide a degree of hedging against inflation such as commodities, and others that provide an attractive higher yield but in a relative low-risk environment such as structured credit.”

Share Story: