Article preview: When equity market volatility strikes, investors often flee to safety in the form of bonds. Fixed income securities (bonds) are traditionally seen as a less risky asset class than equities, although their value can also go down as well as up. In recent years, the prospect of Central Banks hiking interest rates has made bonds a less attractive proposition. This is because bond yields have a negative correlation with bond values; rising interest rates tend to result in capital losses within a bond portfolio. Despite this bond pessimism due to the threat of rising interest rates, recent experiences of equity market volatility appears to have prompted a shift in the outlook for this asset class.
Bond outlook improves following market volatility
This 609 word blog post describes investor perception of investment asset valuations, as reported by the latest CFA UA Quarterly Valuations Index. Includes an expert comment from Will Goodhart, chief executive of CFA UK. Written on 30th January 2019.
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