Developed market sovereign bond issuers face declining demand from one of their core investor bases, according to the results of a survey conducted by OMFIF. Faced with a lower-for-longer yield environment, many global public investors are turning to riskier asset classes to maintain or increase returns, the survey found. These investors – central bank reserve managers, public pension funds and sovereign funds – typically construct risk-averse portfolios. Their reduced appetite for higher-rated sovereign bonds will concern debt management offices hoping for a return to more normal markets following a sustained and unprecedented period of direct central bank intervention. It also calls into question the overall demand from investors globally for their bonds. [...]