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Investors moved to risk-off in second quarter

Investors are favouring risk aversion and seeing most value in safe haven assets, according to CFA UK's latest valuations index survey.

The index, which measured investors' perception of the value of equities, bonds and gold in the second quarter of this year, concludes that investors saw better value in government bonds than in the first quarter of 2018.

Perceptions of overvaulation of bonds decreased 4%, dropping from 80% in the first quarter to 76% in the second quarter. The yield of government bonds, meanwhile, increased slightly over the same period.

But the level of respondents finding value in emerging market equities declined to the second lowest level seen since the first valuations index survey in 2012.

The survey also found that investors have been increasingly moving to gold, typically seen as a safe haven during times of market stress.

Will Goodhart, chief executive of CFA UK, said: “This shift is likely a response to global trade tensions and fears of increasing tariffs ultimately putting pressure on consumer prices.

“That gold in particular is now seen as better value speaks to investors’ anxiety about valuations in both equity and fixed income markets."

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