Money Managers Now Leaning to Bonds

What are professional money managers thinking these days? A new poll by Russell Investments offers an answer. Among the highlights:

•67% of managers are now bullish on corporate bonds
•61% are bullish on high-yield bonds

In both cases, the percentages are a bit higher compared with the previous poll from last December. "In this environment of caution and realism, managers are finding opportunity in spreads between high-quality corporate bonds and Treasuries that are at historic levels," Erik Ristuben, Russell's chief investment officer, says in the accompanying press release. Expectations for junk bonds are also higher from late last year.

U.S. equities, on the other hand, have fallen in the eyes of managers. Value and small-cap equities suffer the most in terms of the current outlook, according to the Russell survey. Here's an overview of how the changes in expectations for the various asset classes stack up:

Comments

[Steve in TN:]

Now, I wonder what the track record is for this group of money managers? Is this a contrarian indicator or are the money managers considered to be part of the "smart money" crowd?

Mar 30 11:25 AM

[Ricard:]

I think by definition this is the 'smart money', and is why the author is commenting on it. However, your point is equally as valid - the smart money hasn't looked very smart in the past year.

Lots of commentary recently has been directed at non-treasury bonds of all colors, so this is not too much of a surprise. I suppose the question is whether or not risk has been fully incorporated into bonds as of now.


On Mar 30 11:25 AM Steve in TN wrote:

> Now, I wonder what the track record is for this group of money managers?
> Is this a contrarian indicator or are the money managers considered
> to be part of the "smart money" crowd?

Mar 30 01:41 PM

[John Tandlich:]

What is their opinion of TIPS?

Apr 01 01:39 AM