Actively managed funds have piled into bonds and away from equities since the start of 2024, marking a shift which could continue for some time given the deteriorating economic outlook, a co-manager of the Abrdn Short Dated Enhanced Income Fund said in a market comment.
“Current investor sentiment is fragile, and bonds could offer a relatively safe haven, particularly if the slowdown extends into recession,” Mark Munro wrote.
Depending on individual investor risk appetite, some might want to focus on corporate or on government bonds. The manager prefers defensive stocks and companies with resilient cash flows, and is less inclined to hold cyclical and tariff-exposed sectors such as autos and industrials in this environment.