Global fund managers have warned corporate bonds are the most overvalued they have ever been and are at risk of a sell-off, while liquidity conditions are getting worse.
A survey by CFA UK of 300 global fund managers found four out of five managers felt bonds were overvalued, especially corporate bonds, the FT reports. Investors are concerned that new capital rules implemented for banks and a clampdown on proprietary trading has caused a liquidity squeeze, meaning a mass sell-off could trigger a credit crisis. Last week, the Bank for International Settlements cautioned that liquidity was concentrating in the most readily traded securities and that "conditions are deteriorating in the less liquid ones", the Telegraph reports. Treasuries suffered ...
To continue reading this article...
Join Investment Week for free
- Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
- Get ahead of regulatory and technological changes affecting fund management
- Important and breaking news stories selected by the editors delivered straight to your inbox each day
- Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
- Be the first to hear about our extensive events schedule and awards programmes