News Digest: US investors lean towards fixed income options
March 8, 2023
Contrary to the growing concerns in the markets over the steady hike in interest rates and their potential to wreak havoc on the economy, a large chunk of US investors continue to believe that parking their funds on fixed income opportunities is a good bet today.
A note by CoreData Research says a study of 120 US institutional investors found that 55% of them intended to hike allocations to fixed income if the Fed raises interest rates beyond 5%. In such a scenario, investment grade corporate bonds and government bonds could witness the biggest chunk of their allocations.
At the same time, the survey also found that emerging market debt did not curry favor as 23% of those surveyed said they would reduce allocations if the Fed upped rates again. In fact, 43% of the respondents believed the Fed wouldn’t raise rates above 5% fearing economic damage.