Citigroup Says That Asia Wealth Clients Heed "Bonds Are Back" Message

Tom Burroughes

23 August 2022

recently argued that investors should consider going back into parts of the bond market as inflation pressures and equity markets remain under pressure. And it seems as though Asia-Pacific clients have signed up to this idea.

Citi Private Wealth clients in Asia-Pacific have put almost $5 billion into bonds over the past three months. Out of that sum, the majority has been in fixed income funds, including individual bonds or bond funds, with a focus on investment grade high quality corporate bonds.

Private bank clients have also invested in hedge funds with a fixed income focus and various fixed income structures, the bank continued. The main investment currency of choice has been the US dollar.

In late June, David Bailin, chief investment officer at Citi Global Wealth, told this news service that employment levels in economies are full, there have been rate rises already and a lot of negative news is already being discounted. In this environment, bonds look like a smart investment in certain areas.

Bailin’s comments were made at a time when bonds and equities had been sold off, caused by central bank monetary tightening to curb rising inflation – now in double-digit territory in some countries – as well as the Russia/Ukraine war and supply chain disruptions stemming from the pandemic. Bailin noted that since 1963 there have been only six periods when bonds and equities have fallen simultaneously by the amount seen in 2022.

The bank said that in late May it contacted clients via its “Bonds are Back” theme.