Fund managers slash exposure to global equities on trade war fears

US 30-year Treasury plunges to record low

Asset managers and multi-asset teams cut their exposure to global equities in August as the US-China trade dispute threatened to escalate further and Europe continued to show weakness, with firms now wary of the world sliding into recession.

Recent months have already seen investors rushing to the perceived safety of government bonds, sinking the yield on the benchmark US 10-year Treasury below 1.5% for the first time since 2016 and the 30-year below 2% for the first time ever. Negative interest rates in Europe and Japan, meanwhile, have pushed sovereign debt yields below zero in record numbers. There is now more than $17trn of negative-yielding bonds worldwide. Fears over a bond bubble intensify as negative-yielding debt exceeds $14trn Amid the precarious market outlook, UBS told investors in August that it had mov...