The balance of UK-based investment professionals who think that equities, corporate and government bonds in developed markets such as the US and UK are overvalued, rose in the final three months of last year from the previous quarter, new figures show.

The balance of UK-based investment professionals who think that equities, corporate and government bonds in developed markets such as the US and UK are overvalued, rose in the final three months of last year from the previous quarter, new figures show.

According to the CFA UK Valuations Index, a quarterly survey of chartered financial analysts in the UK, showed that the change in sentiment over the three-month period was most marked for developed market equities and government bonds.

The survey is issued by The CFA Society of the UK. It showed that the proportion of UK based investment professionals who believe that developed market equities are overvalued has increased in the last quarter; 44 per cent of respondents rated developed market equities as either overvalued or very overvalued, compared to 37 per cent in the last quarter.

There has also been a decrease in those viewing the asset class as undervalued or very undervalued, from 27 per cent in the third quarter of last year to 22 per cent in the fourth quarter.

As has been the case for the last two years, government bonds remain the most overvalued asset class, with 78 per cent of respondents rating them as somewhat overvalued or very overvalued, an increase of 5 per cent from the last quarter.

There has also been a 3 per cent drop in the number of respondents who view the class as undervalued or very undervalued (6 per cent) compared to last quarter. Corporate bonds are also still viewed as overvalued, with 66 per cent of investment professionals viewing them as such, up from 64 per cent in the last quarter.

Sentiment towards gold is broadly unchanged, with the proportion of investors viewing it as undervalued unchanged and those viewing it as overvalued increasing by 2 per cent to 48 per cent.