Strategic bond managers cut UK holdings as opportunities dry up

The average strategic bond fund now holds less than half its assets in the UK, as managers "starved" of opportunities rotate into Europe, the US, and emerging market debt.

Data from FE shows the average weighting to the UK across the IMA Strategic Bond sector fell to 49% as at 31 March, down from 56% at the end of 2013 and 63% a year ago. Managers have been exploring opportunities in US and European corporates, as well as European and emerging market government debt, rather than remain wedded to the UK. The move away from the country’s bond markets come amid ongoing signs the recovery is taking root in the UK. Positive growth figures have turned investors yet more bearish on gilts, while a lack of new issuance from UK corporates has hampered investors f...