Investors retreat into defensive assets

29 August 2022
| By Staff |
image
image
expand image

Rising bearishness among investors has led to a retreat into defensive assets, according to the latest quarterly manager and intelligence trends report from Bfinance.

Against a backdrop of surging inflation and rapidly rising interest rates, the report noted that investors were challenged to rethink their vulnerability to equity market volatility.

A fallback into defensive assets was reflected by the Bfinance Risk Aversion Index, which moved deeper into bearish, risk-off territory, rising from 0.79 to 0.82 in the second quarter of the year.

Among the multi-asset managers tracked for the index, equity exposure fell to less than 32% (3 percentage points below the long-term average), while weightings to fixed income and other diversifiers rose to 68%.

According to August’s report, as investors sought out new sources of portfolio diversification, income and inflation protection and real estate attracted 31% of all new mandate searches, while private markets represented 68% of all new search activity for the 12 months ended 30 June 2022.

Equity mandate searches fell in the second quarter, accounting for just 20% of all new search activity over this period. Fixed income searches remained unchanged year over year at 15% of all new activity.

Despite the turbulence in public markets, the report noted that hedge funds and other liquid alternative strategies continued to provide investors with a “significant source” of diversification and returns.

While overall search activity for so-called diversifying strategies remained virtually flat at 11%, Bfinance noted a rising percentage of overlay strategies being implemented by its clients during the period, which resulted in this segment outstripping all others on a ‘proportion of assets’ basis.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest developments in Super Review! Anytime, Anywhere!

Grant Banner

From my perspective, 40- 50% of people are likely going to be deeply unhappy about how long they actually live. ...

1 year 4 months ago
Kevin Gorman

Super director remuneration ...

1 year 4 months ago
Anthony Asher

No doubt true, but most of it is still because over 45’s have been upgrading their houses with 30 year mortgages. Money ...

1 year 4 months ago

The country’s sovereign wealth fund has unveiled a flurry of changes to its leadership team, including the appointment of a key executive role. ...

14 hours ago

Following allegations by an adviser that Vision Super refused to work with his offshore assistant due their “non-Australian” accent, the fund has defended its position, w...

16 hours ago

While Australia’s largest super funds are increasingly bringing investment management in-house, Brighter Super is charting a different course as it continues to grow....

20 hours ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
93.34 3 y p.a(%)
2
5
Plato Global Alpha A
28.83 3 y p.a(%)