Markets likely to see bouts of volatility 'for some time'

ON BONDS

MICHAEL MATTHEWS, fund manager at Invesco Perpetual on Bonds

Recent months have seen an almost unrelenting fall in government bond yields. The eurozone sovereign debt crisis, uncertainty ahead of the results of the European bank stress tests, banks de-risking their portfolios and escalating fears the US economic recovery could stall have all seen gilts, treasuries and bunds benefit. Yields are at or near record lows and offer limited value from these levels. For example, the yield on the 10-year gilt fell as low as 2.85% in August and the price stood in excess of £115.5 against a redemption value of £100. Similar to government bonds, the highes...