Schroders' Cordery uses value-contrarian strategy

Adam Cordery manages the Schroders Corporate bond and Monthly High Income Bond funds. Here he explains how appetite for high yield is growing and why now is a good time to be backing financials.

What is your view on government bonds? The yield on the 10-year UK government bond is 3.67%. Historically, government bonds have returned more than inflation, but if you look at inflation today in the UK in terms of the consumer price index (CPI), it is 4% – if you look at it in terms of Retail Prices Index (RPI), it is 5%. The inflation rates we have today are higher than the yield on the 10-year gilt and it is true across the whole curve. If you look at the shorter dated gilts, such as the two-year gilt, the yield on that is 1.4%. What that means is it is going to be mathematically i...