100-year bonds: Buying opportunity or ‘nuclear bomb' for portfolios?

M&G's Richard Woolnough has said fixed income investors should overcome their fear of duration and embrace an expected uptick in 100-year bond issuance this year, but peers are sceptical about the bonds.

Speaking to investors earlier this month, Woolnough said the increased issuance of such instruments represented a big opportunity for  investors in the coming months. His comments come after the issue of the first ever sterling-denominated 100-year bond by utility EDF in January, priced to yield at 6.1%. That was followed by the century bond issued by Mexico in March with a yield of 5.75%. Woolnough said long-dated bonds can be a “powerful driver of returns”. He called for bond investors to stop fearing duration following a year in which many of his peers cut their duration risk in a ...