Global funds still recommend bonds instead of shares
US, WASHINGTON (ORDO NEWS) — Global fund managers are convinced that the global economy is already in a state of recession, and recommended increasing investment in bonds in March to the highest level in at least seven years, stocking up with cash instead of stocks, a Reuters poll showed.
The coronavirus pandemic and the collapse in oil prices led to the fastest sale in financial markets since the Great Depression of 1929.
Global stock markets lost about $ 15 trillion, oil prices fell 60% after Saudi Arabia and Russia launched a price war, and currencies in major emerging economies, including Brazil, Mexico and South Africa, collapsed by more than 20%.
U.S. Treasury bonds have already yielded 13 percent yields since the start of the year amid the Fed’s announcement of unlimited bond purchases, the infusion of trillions of dollars into the market and a cut in interest rates to almost zero.
According to a Reuters survey of 34 fund managers around the world, held March 16-30, in the global model portfolio, the share of bonds – a key indicator of investor caution – has grown to its highest level since the start of a series of surveys in early 2013, to 43.1% from 41 , 4% last month.
“We are experiencing an extremely fast economic downturn, which probably means that GDP in the first quarter will be in negative territory, but, of course, most of the impact on GDP will be in the second quarter,” said Benjamin Suess of UBS Asset Management.
“The monumental scale of stimulus measures announced by central banks can only reduce bond yields. Even when investors liquidate assets that are easier to sell, such as US Treasury bonds, despite the risk-off, ”said Craig Hoyda of Aberdeen Standard Investments.
“The Fed’s scale of purchasing power will limit bond yields.”
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