Advisers backing bonds as recession looms

Advisers backing bonds as recession looms

Advisers are starting to find bonds more interesting as an investment, despite the sharp price falls this year, according to the latest FTAdviser Despatches poll.

The online poll ran from November 1 to November 21, and asked the question: “Are bonds now a buy?”

By a majority of 67 to 33, respondents agreed that fixed income assets are now an attractive proposition.

Article continues after advert

Most bonds have suffered sharp price falls this year as investors feared the consequence of higher inflation would be a destruction of the spending power of the income from the bond, and a consequence of the higher interest rates to lead to the price of bonds falling. 

But bonds, particularly government bonds, are historically viewed as being lower risk than equities, and so, as recession fears grip markets, it may be that bonds become more relevant in portfolio construction terms in the coming year, as recession fears start to trump inflation concerns.