Developed Market Equities Overvalued

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    UK CFA Society members think developed markets equities are overvalued, with the highest number of respondents viewing the asset class as overpriced in the history of its valuations index. A society poll found 62 per cent of respondents viewed developed markets equities as overpriced in the second quarter, up from 40 per cent in the previous quarter. That is the highest level in the 4½-year history of the index. Investors’ flight to safe haven assets also affected the perception of government bonds, seen as overvalued by 75 per cent of respondents, compared with 67 per cent in the first quarter. Gold is also seen as increasingly overvalued, to its highest level since 2014 at 39 per cent. In the first quarter, gold was seen as overvalued by 34 per cent. “Our survey respondents are clearly feeling pretty anxious,” says Will Goodhart, CEO of CFA UK, and “It’s hard to blame them. Political risks have come to the fore and the economic outlook is uncertain.”