Bond managers eye protection against UK/eurozone pressures

Fund managers fear strong near-term pressures on gilts and sterling after the market reacted poorly to a hung parliament last week.

UK 10-year gilt yields approached 4% during Friday trading and sterling slid against both the dollar and euro. The hung parliament unwound the rally seen in previous days when  investors flew to the safe haven of government bonds. Fidelity Strategic Bond fund manager Ian Spreadbury has added US treasuries together with increased dollar and renminbi currency positions in response to the Greek contagion fears and UK electoral uncertainty. Spreadbury also bought protection against default on a basket of European companies, using the iTraxx Crossover and iTraxx Europe CDS. He partially he...