Over half of investors say current fixed income allocation is underweight

Written by Dan McGrath

28/11/2024

Over half (57%) of professional investors have stated that their current fixed income allocation is underweight, Managing Partners Group (MPG) has revealed.

The international asset management firm’s research found that 26% said that it is “about right” and 17% said that their organisation’s current allocation to fixed income is "overweight".

However, 99% of these investors, which have total assets under management of €136bn (£113.2bn), said they expect their organisation’s allocation to fixed income to "surge" over the next 18 months.

One in 10 said that this will increase by up to 10%, over two thirds (66%) said this will rise by between 10% and 15%, and 23% said it will rise by more than this over the next year and a half.

MPG is a multi-disciplined investment house that specialises in the creation, management and administration of regulated mutual funds and issuers of asset-backed securities for SMEs, financial institutions, and sophisticated investors. It currently manages two funds with a combined gross value of $500m (£394m).

MPG’s melius fixed income fund is a regulated mutual fund that aims to achieve an attractive level of growth whilst respecting risk diversification. It currently invests in corporate, high yield bonds and life settlements and now offers weekly liquidity and dealing frequency.

Previously the fund offered monthly dealing and had a 90-day notice period. It has delivered returns of 32.17% since launch in late 2019 and 4.77% in the year to date.

Chief executive officer at MPG, Jeremy Leach, said: "Fixed income funds have seen increasing inflows recently and this new research shows that institutional investors and wealth managers are set to significantly increase allocations over the next 18 months.

"Particularly as we enter a period of high volatility, the benefits of diversification and a regular income means fixed income is an increasingly popular choice for institutional investors and wealth managers."

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