Financial advisors are more likely to view global bonds as an important part of a portfolio than investors are, says a survey from BNY Mellon Investment Management released Wednesday.
This situation opens the door for financial advisors to talk with their clients about the need for international bonds in a diversified portfolio, says the international investment manager.
The lack of knowledge about the global bond market makes investors reluctant to invest in global fixed income, BNY Mellon says. According to The Global Fixed-Income Viewpoints survey, which included 356 investors and 201 financial advisors, 70 percent of retail investors do not hold any global fixed-income investments and 62 percent do not see global fixed income as important.
The data indicates there is a significant opportunity for financial advisors to impact retail investment behavior by educating their clients about a globally diversified fixed-income portfolio, says BNY Mellon.
The survey indicated there is a lack of knowledge on the part of investors about the bond market. For instance, 40 percent of retail investors do not know that bond prices go down when interest rates go up.