US investment grade and European investment grade fixed income assets are likely to be the biggest beneficiaries of institutional investors and wealth managers increasing their exposure to fixed income, new research from Managing Partners Group (MPG) has revealed.

Seventy-nine per cent of investors plan to increase exposure over the next 12 months to US investment grade and 78 per cent to European investment grade.

Ninety-four per cent of professional investors believe fixed income is becoming more attractive than equities over the next 12 months, with 17 per cent saying it is becoming significantly more attractive. Around 20 per cent believe a bond rally is very likely in the next 12 months rising to 42 per cent saying a bond rally is very likely over the next 24 months.

Jeremy Leach, CEO at MPG, said: “Fixed income assets are moving up the investment agenda with investors increasingly expecting continued volatility in the equity markets. If major economies do slide into recession that will increase the likelihood of a bond rally if not in the next 12 months, then in the next 24 months.”

Managing Partners Group commissioned the market research company Pureprofile to interview 100 investment professionals working for pension funds, insurance asset managers, family offices, other institutional investors and wealth managers with a total of €107bn assets under management in the UK, US, Germany, Switzerland, UAE, Singapore and Hong Kong during January 2024.

This article was originally published on our sister website, Insurance Asset Management.

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