Henderson's Pattullo: The quest for reliable yield

ON BONDS

The global economy has been showing definite signs of fatigue. While the UK's economy is moribund and growth in Europe has fizzled out, economic activity data from the US, China, Brazil and India have also drifted lower.

The US has shown some signs of resilience at times but the picture is far from a robust recovery. This environment, however, has proved positive for corporate bond returns. The lack of growth remains a major concern, especially in light of the ineffectiveness of the various quantitative easing and monetary policy measures. Given this backdrop, a prolonged period of lower interest rates is on the cards as authorities continue with their run of monetary easing measures. Thanks to the various quantitative easing measures and investors’ flight to safety, core government bond yields have f...