UK bonds look unattractive. Even bond fund managers admit that – they “will be a poor investment in the medium term”, says Dennis Gould, head of fixed income at Axa, quoted in The Observer, who isn’t putting any in his personal portfolio. The problem is that buying by pension funds – who need guaranteed income to match their long-term liabilities – has pummelled yields.
Index-linked (inflation-protected) bonds have been particularly poor, says Philip Coggan in the FT, with real yields on the 50-year gilt as low as 0.4% earlier this year. And as interest rates rise, bonds will become even less attractive.
UK bonds look unattractive. Even bond fund managers admit that – they “will be a poor investment in the medium term”, says Dennis Gould, head of fixed income at Axa, quoted in The Observer, who isn’t putting any in his personal portfolio. The problem is that buying by pension funds – who need guaranteed income to match their long-term liabilities – has pummelled yields.
Index-linked (inflation-protected) bonds have been particularly poor, says Philip Coggan in the FT, with real yields on the 50-year gilt as low as 0.4% earlier this year. And as interest rates rise, bonds will become even less attractive. |
