New research* from Legal & General Investments, one of the UK's largest investment providers, finds that far fewer IFAs will be investing in fixed income in the coming year.
The findings come from Legal & General Investment's What Matters Investment Index which investigates IFAs' views of the market over the next 12 months.
When asked which asset class IFAs intend to invest in over the next 12 months, fixed income saw the biggest drop, from 52% of IFAs who currently invest in the asset class, falling to just 27% who expect to invest across the coming year.
Although the fall in appetite for fixed income was the most significant, no asset class has seen an increased appetite to invest. Unsurprisingly, 1 in 10 IFAs don't know which asset class to invest in over the next 12 months. The following table shows the full investment intentions of IFAs.
Equities remain the number one preference for investment with a multi asset approach being the second choice for IFAs as they look to diversify their investment mix.
Simon Ellis, Managing Director, Legal & General Investments, said: "The What Matters Investment 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."
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