‘Hopium’: Billions flowing from equities to fixed income

Billionaires, pension funds and retail investors are throwing billions of dollars at the bond market as the hunt for yield beyond equity markets continues.

“Everyone is running for the hills when it comes to risk, and I mean equities, commercial property, VC, PE and high-risk debt, and they’re flocking to safety and security.” Coolabah Capital Investments founder and chief investment officer Christopher Joye told Markets with Madison.

The big-time Australian-based bond trading firm has seen inflows increase to A$9.3 billion in funds under management, from A$5.9b this time last year.

“So there have been very significant asset allocation shifts.

“We’re getting in-flows from pension funds, billionaires, mums and dads, insurance companies.”

Joye expected demand for fixed income to continue as he forecasted equities to disappoint.

“People have brain damage from the volatility of the equity market and the hopium that seems to never get fulfilled.”

Watch today’s episode of Markets with Madison to hear how Coolabah is finding mispricings daily in the US$133 trillion bond market.

Get investment insights from the experts on Markets with Madison every Monday and Friday on the NZ Herald.

Disclaimer: The information provided in this programme is of a general nature, and is not intended to be personalised financial advice. We encourage you to seek appropriate advice from a qualified professional to suit your individual circumstances.

Madison Reidy is the host of New Zealand’s only financial markets show Markets with Madison. She joined the Herald in 2022 after working in investment, and has covered business and economics for television and radio broadcasters.