We surveyed 100 fixed income asset allocation decision makers at public and private pension schemes, OCIOs, insurers, endowments and foundations between February and March 2024. We captured their thoughts on a range of topics including the fixed income market environment, intentions and attitudes to credit markets and to emerging market debt, plus thoughts on active management.
Here are three highlights…
A tale of cautious optimism
Despite markets recalibrating expectations on the timing and depth of central bank rate cuts, almost three-quarters of asset owners agree the next 12 months will be a window of opportunity to take advantage of elevated bond yields. There’s an appetite for quality and to increase duration, along with a balanced approach to increasing credit risk.
IG allocations suggest a shift to US and Europe
Three-quarters of respondents anticipate increasing or rebalancing IG credit exposure, with greater allocations focused on US and Europe over domestic allocations.
Conviction in active management
In an uncertain macro environment, a selective approach to fixed income is needed and the risk management benefits of an active approach are particularly valued. Asset owners were asked to what extent they felt an active approach would add value – with the most significant benefit anticipated in higher yielding assets.
You can now read the full whitepaper at the link below
