EUROPE – The proportion of UK-based investment professionals who believe corporate bonds are overvalued has doubled over the last 12 months, according to the valuation index of the CFA Society.
In February, the CFA UK Valuations index showed that 68% of respondents believed corporate bonds were somewhat or very overvalued, compared with only 34% in the first quarter of 2012.
Government bonds, meanwhile, were rated as overvalued or very overvalued by 83% of respondents, up from 72% in the first quarter of 2012.
Will Goodhart, chief executive at CFA UK, said: "When we launched the index a year ago, the overwhelming majority of investment professionals viewed both government and corporate bonds as overvalued. They are even more certain that is the case today.
"The increase in those who see corporate bonds as overvalued has been particularly dramatic. On the other hand, despite the increase in equity values since our last survey, most respondents continue to believe equities are undervalued – emerging market equities in particular."
The proportion of investment professionals viewing equities as over or undervalued has been relatively constant over the year.
Just under half of respondents – 49% and 48%, respectively – viewed emerging market equities as being undervalued or very undervalued in both the fourth quarter of 2012 and the first quarter of 2013, up from 43% in the first quarter of 2012.
Just 22% believe them to be overvalued compared with 27% in the first quarter of 2012.
Developed market equities have seen a declining proportion of investment professionals viewing them as undervalued, with 40% of investment professionals perceiving the asset class as undervalued in the first quarter of 2013, down from 47% a year earlier.
Gold continues to be seen overvalued, but not as many investment professionals hold this view as did 12 months ago.
Only 47% of respondents view the commodity as overvalued now, compared with 61% who held this view in the first quarter of 2012.