- ETF buyers are shunning equity exposure and rushing into bond funds
- We look at the subsectors and funds benefiting most from such trends
The first half of the year has been kind to at least some of 2022’s contrarian investors. The S&P 500 index was back on form with a sterling total return approaching 10 per cent, European equities surged and even Japanese shares enjoyed rich gains after a long stint in the doldrums ('Funds to take advantage of a new Japan', IC, 30 June 2023). In the US, the tech giants that faltered so notably last year have made huge returns so far in 2023.
Other parts of the investment universe have looked less robust, with government bonds in particular continuing to suffer in the face of sticky inflation and rising interest rates. In the UK, the 10-year government bond yield, which moves inversely to its price, has risen from around 3.4 per cent at the start of the year to 4.4 per cent at the mid-year stage.