More than 80% of investors believe corporate bonds are currently overvalued, a survey by the CFA Society of the UK has found.
The proportion of investors viewing the asset class as too pricey climbed for the fourth consecutive quarter to hit 82% in Q1 this year. This was up 4% on the previous quarter and represents an all-time high since the survey began five years ago.
The CFA’s survey was conducted between 10 February and 7 March this year among 219 analysts and investors.
The results also showed government bonds continue to be perceived as overvalued with 78% of investors quizzed holding this view – the same percentage as the previous quarter.
CFA UK chief executive Will Goodhart said: “Despite some volatility over the past quarter, bond yields are pretty much as they were when we polled members at the end of last year.
“It appears that respondents find that somewhat surprising given the sense that growth and inflation are accelerating and that central banks are signalling strongly or weakly that interest rate-setting is entering a period of normalisation – for which read that rates will rise.”
Elsewhere, 68% of respondents viewed developed market stocks as overvalued, while around half considered emerging market equities to be undervalued (48%).
Goodhart added: “Emerging markets equities have had good support over the past quarter, but respondents seem to believe that they may have further to run.”
The survey also saw a significant fall in the perception of gold as overvalued from 32% in Q4 2016 to 24% in Q1 2017. Some 46% of those polled believed the safe-haven asset to be fairly valued at present.
