The research found that 45 per cent of financial advisors and wealth managers surveyed identified geopolitical instability and energy price volatility as the greatest risks facing the fixed income market in the coming year.

This was followed by concerns over growing government issuance (44 per cent), and persistent inflation and interest rate volatility (42 per cent), both of which the fixed income markets have been battling with since the beginning of 2026 after the breakout of the US/Iran war.

The research, which was conducted from 22 to 26 May 2026 by Censuswide, covered a sample of 100 finance professionals, assessing the greatest risks and opportunities for fixed income over the next 12 months.

Respondents also highlighted that central bank divergence and currency effects, such as policy differences between the European Central Bank and the US Federal Reserve (38 per cent), as well as the potential for credit deterioration (32 per cent), were risk factors.

Nearly one-third of respondents were concerned about heavy corporate bond issuance, linked to AI-driven capital expenditure.

Despite these headwinds, 57 per cent of financial advisors and wealth managers believe that new issuance, including that from high-quality corporates, will provide opportunities to pick up incremental spread.

This was followed by 55 per cent who said that sector and issuer divergence will be central to creating alpha opportunities, the survey shows.

“The fixed income market continues to navigate a highly complex backdrop, with advisors and wealth managers clearly recognising that geopolitical uncertainty, elevated government borrowing and persistent inflation remain the defining risks over the next 12 months,” Tom Caddick, managing director at Nedgroup Investments, said. “Recent events have reinforced how quickly market conditions can shift, making careful risk management and active management more important than ever.”

“At the same time, it’s encouraging that advisors are looking beyond the headline risks and identifying compelling opportunities,” he continued. “Increased issuance from high-quality corporates, alongside greater dispersion across sectors and issuers, should create a richer environment for active managers to add value. In periods like these, disciplined credit research and a selective approach to portfolio construction can help investors uncover attractive risk-adjusted returns while remaining resilient to ongoing market volatility.’’