While nominal government bonds have witnessed strong outflows in recent months, inflation-linked bonds saw their highest monthly net inflows ever in October. Is this revival going to last?
Tag: Duration
Investors prefer short-duration in EM debt
As part of their ongoing search for yield, European investors are intending to increase their exposure to emerging market debt. While ready to take on a bit more volatility, they still shy away from taking on duration exposure in the region.
Investors in Barcelona swap duration risk for credit risk
Barcelona’s investors are remarkably unanimous in their fixed income allocation. Almost all of them are overweight short-duration bonds and eight in 10 interviewees are planning to decrease their allocation to long-duration European sovereign debt.
Is timing now more important than time in the market?
In its latest Flow Show note, Bank of America Merrill Lynch pointed out that, at current rates, it would take you 1387 years to double your savings in a 1-year German deposit account.
Profile interview – José Luís Borges
Fearing that the current preoccupation with long/short equities will lead to short trades becoming too crowded, José Luís Borges insists on his long/short funds being market-neutral. However, the Lisbon-based head of institutional portfolios at BPI Gestão de Activos is otherwise happy to be overweight equities.
Replacing fixed income with equity market-neutral – a dangerous idea
Some investors replace part of their fixed income holdings with market-neutral equity. Though these funds are supposedly uncorrelated to the equity market, it’s better to choose a diversified approach, argues Rui Machado, alternative investments director at IM gestao de ativos in Lisbon.
The Great Rotation – from bonds to absolute return
Fund selectors expect an annual return of less than 2% from their bond portfolios over the next five years. The Great Rotation is therefore finally happening. However, it’s not from bonds to equities, but to absolute return.
Fund buyers expect another market correction
The equity markets have only just stopped falling, but fund buyers are already preparing for the next market correction. Eight in 10 of delegates at Expert Investor’s Pan-European Congress in Rome expect equity markets to repeat their more than 10% falls before the end of the year.
Catalan fund buyers brace for next market correction
The start of the year has been rough for equity markets, but investors in Barcelona expect another market plunge before summer. They are also hedging their bets politically, it seems, as the uncertain investment outlook has prompted many to drop their support for independence.
Portuguese investors replace bonds with absolute return
Portugal’s fund selectors are switching part of their bond allocations to absolute return funds. They now have between 10% and 15% of their portfolios allocated to absolute return, and that share is rising.
