Hodges snaps up gilts after sell-off

Legal & General Investment Management's (LGIM) Richard Hodges has bought back into gilts, arguing ultra-low government bond yields are here to stay despite the recent market sell-off.

Over the past two months, the yield on a 10-year UK government bond has jumped from 1.78% to 2.48%, according to Tradeweb, amid fears Federal Reserve chairman Ben Bernanke could begin unwinding quantitative easing in the US later this year. However, Bernanke has hinted he will not be hasty in winding down from the stimulus programme, saying the US will need accommodative monetary policy “for the foreseeable future”. Hodges, who manages the top-performing £1.8bn L&G Dynamic Bond trust, expects QE to keep government bond yields near record lows for some time. He has removed his short...