ARC releases survey showing positive sentiment towards bonds
ARC says that there is evidence that the financial repression of bonds delivering negative real returns may be ending.
Latest investor sentiment survey from Asset Risk Consultants (ARC) shows that positive sentiment towards bonds is at its highest level if we consider the last decade, after new estimates show that the average portfolio fell 9.8% in 2022.
The survey comes after a challenging year for wealth and investment managers as a combination of factors including the war in Ukraine, inflation and slowing global growth triggered falls in the value of most asset classes over 2022. Multi-asset class portfolios delivered negative returns for the vast majority of private client investors as the table below illustrates.
With falls in almost all asset classes, the notable exceptions being energy and commodities, there were very few opportunities for investors to avoid losses. Sharp rises in government bond yields meant that traditional safe-haven assets also failed to provide capital protection.
Key points of the survey:
- most common portfolio strategy down 9.8%* in 2022 based on fourth-quarter performance estimates
- 12-month positive change in sentiment towards the bond sector, driven by conventional bonds and the 10-year bond market – up to 53% from 2% at the end beginning of 2022
- positive sentiment on healthcare, financials and energy – negative on consumer discretionary
- significant negative swing in the outlook for the US dollar compared to a year ago
- negative sentiment on private equity and commercial property
For more details see ARC’s 2022 A Year in Review.