Thanks to everyone who responded to our survey. Please hit us back with feedback or questions you’d like to see asked – our goal is to help, after all.
Quick summary, most respondents:
On to the results.
Real Yields: Investors have a wide distribution of expectations for 10yr TIPS to peak, with a median around 150bps. Our respondents think other investors expect 10yr TIPS to peak ~175bps. 150 is 75bps higher from when we asked and would be the highest level since 2010. Investors think real yields have a ways to go, though not quite as far as they suspect others think.
Investors expect pre-GFC real rates.
Higher real yields support Value, all else equal, and have been a primary driver of Value returns so far this year. But Value’s outperformance has been outsized relative to the move in real yields. Expectations for substantially higher real yields may be why Value’s outperformance has been outsized. The tailwind to Value from even higher real yields may be less substantial than presumed, given everyone’s lofty expectations.
Energy Exposure: Investors, if they are exposed to Energy, are much more exposed than normal. Not as many have reduced exposure as is believed.
