Twitter icon Email alerts icon Latest News RSS icon Magazine icon Stay connected:

View the article online at http://citywire.co.uk/wealth-manager/article/a660416

7 out of 10 professional investors deem corporate bonds overvalued

by James Phillipps on Feb 21, 2013 at 08:07

7 out of 10 professional investors deem corporate bonds overvalued

More than two thirds of professional investors now deem corporate bonds overvalued, twice the number at the start of last year.

The CFA Society of the UK’s latest Valuations index reveals 68% of respondents now view corporate bonds as overvalued or very overvalued, compared to 34% in the first quarter of 2012. Government bonds are even more out of favour with 83% now branding them overvalued, up from 72% at the same point last year.

Despite the strong recent run in developed market equities, just 40% of investment professionals consider them overvalued, down from 47% in Q1 2012, despite most indices having delivered double digit returns over the intervening year.

Similarly, gold remains broadly out of favour and although the price of the precious metal has slipped by 8.57% over the last 12 months, 47% still view it as overvalued, albeit this is down from 61% this time last year.

Will Goodhart, chief executive of CFA UK, said: 'When we launched the Valuations index a year ago, the overwhelming majority of investment professionals viewed both government and corporate bonds as overvalued. They are even more certain that is the case today. The increase in those who see corporate bonds as overvalued has been particularly dramatic. On the other hand, despite the increase in equity values since our last survey, most respondents continue to believe that equities are undervalued – emerging market equities in particular.'

3 comments so far. Why not have your say?

Badders

Feb 21, 2013 at 08:50

I don't understand your headline v the text?

report this

MR C.

Feb 22, 2013 at 00:34

Journalists can't count.....a bit like politicans.

report this

Badders

Feb 22, 2013 at 08:19

Ah, changed it now - makes abit more sense!

report this

leave a comment

Please sign in here or register here to comment. It is free to register and only takes a minute or two.

News sponsored by:

Sponsored Video: Bringing it all back home


As the UK coalition government strives to rebalance the national economy, so called 'reshoring' looks set to play an increasingly important role in economic recovery.

Today's top headlines

Sponsored Video: Barings on investing in Frontier Markets


From Nigeria to Pakistan and from Kenya to Kuwait, frontier markets are catching investors' attention as never before.

More about this:

Archive

On the road

Click here to find out more from the Audience Development team.

Sorry, this link is not
quite ready yet