Where now for bonds?

Anyone who thought before the financial crisis that fixed income was an inert asset class might now be forced to reconsider their views. Far from offering immunity from the volatile prices of other investment assets, fixed income, both corporate and government, has been buffeted by the financial storm. In their droves, investors have sought security from capital risk and so have invariably plumped for the sovereign guarantee that gilts offer. This has pushed gilt yields to very low levels as the buying momentum has lifted prices. To add to that, quantitative easing has catapulted central ...