Poles' interest in bonds has decreased

Polish bonds currently have 26 percent in their portfolio. native investors. Bonds' popularity decreased in the last quarter. Only 15 percent. investors are planning to invest in bonds within the next year. In the fourth quarter of 2021, when Prime Minister Morawiecki bought the bonds, 20 percent wanted to do the same. Polish investors.

Bonds are no longer fashionable

The popularity of bonds fell from 29%. in the previous quarter. This is a trend that we observe all over the world, as interest in bonds has declined in all global markets. 11 percent Polish investors also have foreign bonds in their portfolios. In this case, we do not deviate from the global average, because globally, such instruments in the portfolio have 12 percent. investors.

Source: eToro Puls Individual Investor

How does Poland compare with Europe?

Domestic bonds have 27 percent in the portfolio. global investors. Poles invest in domestic bonds more often than Germany (23%), but less often than Italians (45%), French (33%), British (31%) and Americans (29%). In our region, Romania has more bonds in their portfolios (29%). Czechs, on the other hand, have the same number of them as Poles (26%). This category of domestic bonds includes both government bonds with a fixed interest rate and those linked to inflation (or WIBOR indicator). And also domestic corporate bonds. Fixed-rate bonds have declined over the past year, while inflation-linked floating-rate bonds have become more popular as a hedge against future price increases. When inflation reaches a peak and rates start to decline, the trend will reverse and the value of fixed-rate bonds will begin to rise against those with floating interest rates.

Investors, however, do not believe that this trend will be reversed in the next 12 months. Only 15 percent. investors in Poland intend to invest in bonds during this period, this number fell from 20 percent. in the previous quarter.

Also 20 percent. Polish investors were interested in buying bonds in the fourth quarter of 2021, when the purchase of 10-year inflation-linked bonds was more attractive than today (in the first year the interest rate was 1,7%, in the next year it was inflation +1 pp.). At that time, according to media reports, bonds of considerable value were purchased by Prime Minister Mateusz Morawiecki.

Bonds and inflation

Indexed bonds are currently one of the ways to protect against inflation. As inflation starts to slow down and we are closer to the end of the rate hike cycle, prices of fixed-rate bonds will start to climb. It is worth observing this process and being prepared for a rebound in the bond market.

About the author

Pawel Majtkowski - analyst eToro on the Polish market, which shares its weekly commentary on the latest stock market information. Paweł is a recognized expert on financial markets with extensive experience as an analyst in financial institutions. He is also one of the most cited experts in the field of economy and financial markets in Poland. He graduated from law studies at the University of Warsaw. He is also the author of many publications in the field of investing, personal finance and economy.