Advisers shy away from bonds

Financial advisers will be investing less and less in fixed interest over the next 12 months, according to research by Legal and General Investments.

A poll by the fund house asked IFAs which asset class they intend to invest in over the next year. Bonds saw the biggest drop, from 52 per cent of IFAs who currently invest in the asset class, to just 27 per cent who expect to invest in it over the coming 12 months.

Although the fall in appetite for fixed income was the most significant, no asset class saw an increased appetite for investment. One in 10 IFAs said they don't know which asset class to invest in over the next year.

Equities were the top choice for IFAs, while a multi-asset approach came second.

L&G’s managing director Simon Ellis said: "The index clearly shows the level of uncertainty that even financial advisers are experiencing. Having secured strong returns in recent times, investors are now becoming more bearish about the coming months and are perhaps positioning some of their holdings in cash."

"There is a great deal of indecision across asset class choice, performance expectations and investment patterns at present."

He added: "It is no surprise that investors have been re-evaluating their portfolios with a view to repositioning their investments. The key is to diversify intelligently, which may explain why multi-manager funds have become so popular over the last few years."