Henderson's Pattullo: Gilt rally still has legs

UK government bonds are hugely expensive but 10-year yields may yet move down towards 1.5%, according to Henderson's head of retail fixed income John Pattullo.

Ten-year gilt yields made new record lows yesterday, falling below 1.88% for the first time as eurozone fears reared their head again, and Pattullo (pictured) said valuations are affecting his positioning in corporate bond markets. "UK government bonds are absurdly expensive and this is why we do not currently have a lot of exposure to AAA corporate bonds as they quite reliant on the performance of the gilt market," he said, speaking at the Morningstar Investment Conference. The manager is also avoiding core government bonds themselves, despite suggesting benchmark gilt yields could f...