Gartside offloads US linkers but still fears inflation

Schroders' Nick Gartside has switched from inflation-linked to nominal US treasuries in his £316.7m Strategic Bond fund as the market continues to be "fixated on deflation".

Gartside switched his fund's 10% allocation in US linkers, known as TIPS, to conventional bonds earlier this month. The manager admits the move is a significant departure from his previous positioning, as Gartside still believes the world faces sharp inflationary pressures. The manager first introduced TIPS in December 2008, at a real yield of 3%. The real yield had fallen to 0.5% when Gartside switched to nominal treasuries. "We view this as a tactical trade. We will be buying our TIPS back at some stage," Gartside says. "But we just felt we are in a world with a greater degree of...