Bonds overvalued but remain in demand

CNBC reported that bonds are not well-liked by fund managers.

A survey by Bank of America-Merrill Lynch found that a net 54 percent of fund managers remain underweight in bonds in April. A net 84 percent said bonds are overvalued, the highest in the survey's history.

And yet, demand for bonds is expected to remain firm. JPMorgan has estimated that demand is likely to outstrip supply globally by around $450 billion this year on a notional basis, widening from $384 billion last year, with retail investors expected to be major contributors.

Richard Jerram, chief economist at Bank of Singapore, said that "there is still globally a search for yield taking place".

In addition, JPMorgan noted that equities have rallied even more than bonds in recent years, leaving retail investors "more overweight equities vs. bonds even as they bought more bond than equity funds over the same period".