gilts

Negotiating 'dangerous' markets

Gilts have continued to surprise the market with stellar returns, but should investors expect a sell-off this year?

The yield on a 10-year UK government bond fell to a new record low below 1.4% on Thursday after comments the Bank of England is in 'no rush' to raise interest rates.

The rapidly falling oil price is creating the perfect environment for a 'disinflationary boom' in asset prices, according to the managers of the Ruffer investment company.

Diverging fortunes for government bonds and credit in recent weeks have prompted some fund buyers to suggest strategic bond portfolios could flourish again in the coming months.

The golden age of exceptionally low bond volatility is drawing to a close, and investors would be wise to lock in any handsome profits before monetary policy shifts, explains Lombard Odier's Grant Peterkin.

Core government bond yields have tumbled this afternoon, as investors rush back to safe havens and stocks slump amid widespread selling.

The UK's blue chip index has shed 100 points to drop below 6,350, hitting a fresh 12-month low at the end of a volatile week for equity markets.

The pound reached a two-year high against the euro overnight while yields on gilts and treasuries rose, as Scottish voters rejected independence from the UK and investors swapped safe havens for equities.

Threadneedle's Richard Stevens is to leave the firm at the end of the month, handing over his trio of government bond funds to other members of his team, Investment Week can reveal.