Funds suggest cutting stocks, expect U-shaped global economic recovery

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Funds suggest cutting stocks, expect U-shaped global economic recovery GlobeInvestor

This translation has been automatically generated and has not been verified for accuracy.Global funds recommended an increase in bond holdings to the highest level in seven years, at the expense of stocks, and said the recovery in the coronavirus-hit world economy will be U-shaped, a Reuters poll showed.

While the yield on benchmark U.S. 10-year Treasuries has held around 0.6%, the poll suggested an increase to bond holdings to their highest since the poll series started in early 2013, to 43.3% from 43.1% last month. Responding to an additional question, 60% of fund managers, or 12 of 20, said the global economic recovery would be U-shaped. Four respondents said it would be more like a tick mark and the remaining expected a W- or L- shape.

“At the moment it looks like the virus and associated mobility restrictions are going to remain for a while. Governments and citizens are wary of renewed outbreak and are likely to only partially reopen economies in the near term,” said Benjamin Suess, director at UBS Asset Management. On Wednesday, the Fed said the ongoing pandemic would “weigh heavily” on the near-term outlook and posed “considerable risks” for the medium term.

 

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