Bringing you live news and features since 2006 

Government Bonds viewed as currently overvalued by investment professionals


Government Bonds are considered most overvalued relative to fair value on a one-year time horizon according to the CFA UK Valuations Index, a newly launched quarterly survey of UK based investment professionals by the CFA Society of the UK (CFA UK).

Asked whether Government Bonds currently represent fair value, 72% suggested that they are somewhat overvalued or very overvalued compared to only 12% who view them as somewhat undervalued or very undervalued. This contrasts with the views offered on Equities, where just 27% believe there is overvaluation. Developed Market Equities were deemed slightly more undervalued than Emerging Market Equities, according to 47% against 43% respectively.

Will Goodhart, chief executive of CFA UK, says: “Our research is not intended to provide a bellwether for the investment climate, or indeed to dispute the notion that markets reflect fair value over the long-term. Over the long run, markets are efficient and investors broadly rational. However, at any single point in time, markets can temporarily depart from fundamental value –  our research indicates which asset classes our members think may no longer offer significant value, based on current prices, and others where there might be more value for new investments.

“The current dislocations appear to be most likely attributable to the continued uncertainty about the global macroeconomic outlook and the prospects for inflation and interest rates.”

Opinions from respondents were mixed for the valuations of Corporate Bonds, with a relatively even split of responses citing them both as undervalued, fair value or overvalued. However, the results appear to suggest that Gold, a safe haven of 2011 is now relatively fully valued.


Latest News

Morningstar has published a review of the European ETF market for the first quarter 2024, which finds that it gathered..
ETF data consultant ETFGI reports that assets invested in the global ETF industry reached a new record of USD12.71 trillion..
Calastone has published an ETF white paper which examines several of the processes that take place across the lifecycle of..
Adapting product lines to fit into changing methodologies and meet shifting demand is essential to remaining relevant in the industry..

Related Articles

Kristen Mierzwa, FTSE Russell
Index Investments Group (IIG), a division within index provider FTSE Russell, has extended its range of indices through two new...
US ETF issuers of active ETFs are facing an increase in fees from the big custodian firms, such as Charles...
Taylor Krystkowiak, Themes ETFs
Themes ETFs opened its doors in December 2023, with an introductory suite of 11 ETFs – seven thematic and four...
Konrad Sippel, Solactive
At the end of March, financial index specialist, Solactive, published its 2024 annual report on future trends.  ...
Subscribe to the ETF Express newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by