Nine out of 10 professional investors (88%) expect there to be rotation from equities into fixed income over the next 18 months, according to research from Managing Partners Group (MPG).
The researchers found a large majority of wealth managers and institutional investors are planning on locking in gains from strong equities performance to rebalance portfolios more towards bonds.
MPG’s survey gathered views from of global institutional investors and wealth managers with total assets under management of €136bn.
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It was also determined that more than nine in 10 (91%) of those taking part expect equity markets to experience high levels of volatility over the next 18 months and of these, 96% think this volatility will lead to investors increasing their allocation to fixed income.
Less than one in 10 (8%) predict the levels of volatility in equity markets will stay the same as it is today.
With the current and expected market volatility, almost all (95%) of those surveyed expect active bond strategies to outperform passive ones in the next five years.
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Jeremy Leach, chief executive of Managing Partners Group, said: “With the current and expected market volatility our new research shows a resounding agreement among professional investors to lock in the gains they’ve made from equities and rebalance portfolios to fixed income.
“Their view is so strong that many professional investors believe that the traditional 60% equities 40% fixed incomes allocation should be dramatically revised to include a much higher proportion in bonds.”
