Expert Investor - Fund Selector Asset Class Report October 2017 FSACR_Oct17_BOOK.v2 | Page 7

Bonds Buying/selling intentions
Increase
Hold
Decrease
Not use
These tables show the forward-looking
buying and selling intentions of European
fund selectors and asset allocators
towards various bond strategies.
Developed mkt govt bonds: Sellers rule
the sentiment picture with 40% of fund
selectors looking to decrease weightings.
Developed mkt corporate bonds: There is
equally little appetite for investment-grade
credit but holders are in the majority.
Developed mkt high-yield bonds:
Sentiment has turned against high yield
with sellers outnumbering buyers; €3bn
net fund losses in July alone.
EM government and corporate bonds: The
top pick among fixed-income asset classes
with 30% expecting to buy more. Net fund
flows have been positive in every month
from Jan - Jul ‘17 amounting to over €41bn.
Unconstrained bond funds: This is an
interesting asset class; sentiment has
been consistently positive and flows into
unconstrained (flexible) bond funds have
been exceptional - see page 14.
Convertible bonds: We added this asset
class to the mix 6 months back. About
half of respondents use it and buyers and
sellers are tied at one fifth of those. Developed market government bonds
Convertible bonds Developed market high-yield bonds
Emerging market government bonds
100 100
80 80
60 60
40 40
20 20
0
Q3 ’14
Q3 ’15
Q3 ’16
Q3 ’17
Developed market corporate bonds
0
100
80 80
60 60
40 40
20 20
Q3 ’14
Q3 ’15
Q3 ’16
Q3 ’17
0
100 100
80 80 80
60 60 60
40 40 40
20 20 20
Q1 ’17
Q2 ’17
Q3 ’17
0
Q3 ’14
Q3 ’15
Q3 ’16
Q3 ’16
Q3 ’17
Q3 ’14
Q3 ’15
Q3 ’16
Q3 ’17
Unconstrained bond funds
100
0
Q3 ’15
Emerging market corporate bonds
100
0
Q3 ’14
Q3 ’17
0
Q3 ’15
Q3 ’16
Q3 ’17
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