Bank of America Poll Reveals Investors Regret Bond Bets Amid Rising Inflation Worries
A Bank of America poll has revealed that investors are regretting their decision to pile into European and UK bonds, particularly longer-duration debt.
The survey found that investors increased their duration longs starting in August and stuck with them, despite sentiment on interest rates deteriorating. This has led to a mismatch between portfolio positioning and expectations, leaving investors vulnerable to rising inflation worries and global bond selloffs.
The upswing in yields can be attributed to rising energy costs and selling across other global bond markets, which has made the situation worse for those heavily positioned in longer-duration European and UK debt.
According to Bank of America strategists, 'the gap between duration exposures and views is at record highs in EUR and GBP. Buyers' regret is pronounced.'