A glance at our income allocations database reveals fixed income exposure has gone up over the course of 2023.

The average exposure to fixed income now sits at 36 per cent - up from 33 per cent at the turn of the year.

This has come at the expense of most other asset classes.

It is really only cash which has held level since then - at an average exposure of just below 4 per cent.

Equities have fallen from 49.5 per cent to 47.9 per cent while alternatives and property have both fallen from an average of around 6.5 per cent to around 5.5 per cent.

So which areas of fixed income have done best out of this shift?

The answer is strategic bonds, where we may well be seeing an unwinding of allocators’ previous caution.

Strategic bonds have gone from an average allocation of 3.5 per cent to 6.9 per cent.

Allocators had previously told us they were sceptical about strat bond funds because of concerns they were too long duration but it seems DFMs have made their peace with them.

A further sign of this is the fact that short duration funds in allocator portfolios have gone down from 2.4 per cent to 1.3 per cent on average.

So which equity regions have suffered most at the expense of strat bond funds?

Here the answer is global equity funds, which have gone from 7.4 per cent on average to 6.3 per cent.

It seems that in the building of income portfolios, DFM are choosing to outsource allocation to bond nerds over equity fund managers.