Institutional fixed income investors aim to increase their level of risk over the coming year as they eye opportunities overseas, according to research from Aeon Investments.
Overall, 84% of investors surveyed plan to up their risk over the next 12 months, with one in 10 planning to make “dramatic increases”.
Meanwhile, 15% will keep risk levels the same while 1% will make dramatic decreases.
The study surveyed pension funds, insurance asset managers, family offices and wealth managers who collectively manage around $544bn (£430.8bn).
Looking further ahead, investors plan to further up their risk levels. Over a third (38%) of survey respondents said they will make dramatic increases and 44% will make slight increases over the next three years. An additional 17% said they expect to maintain current risk levels and 1% said they will decrease them dramatically.
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Over the next three years, 88% of respondents also revealed they plan to have a more global fixed income allocation, with 35% intending to make dramatic increases.
Khalid Khan, Aeon Investments head of portfolio management, said: “Increasing global fixed income allocations maximises diversification across all markets and issuers, and can have a positive influence on the portfolio’s risk return profile. The same is true of incorporating a broad range of asset classes and sectors.”
He added: “Investors should seek a manager that offers experience and demonstrable track record across the fixed income spectrum.”
This article was written for our sister title Portfolio Adviser