How are gilt managers adapting to tougher asset class conditions?

Recent events in the US have caused another headlong surge into UK gilts for their supposed safe haven status, driving yields down to fresh lows.

Last week, the yield on 10-year gilts fell to 2.76% on fears about US and European debt problems. It left government paper trading at just 10 basis points above US treasuries, against an average of 27 over the past two years according to Bloomberg. Market watchers also highlighted several other factors behind this, with interest rates remaining at record lows and the Bank of England’s £200bn purchase as part of QE distorting prices. Many investors are also still worried economic growth in the UK looks vulnerable and this has helped keep gilt prices high and yields depressed. Aga...