Uphill struggle forecast for UK corporate bonds

corporate bonds

This year will need a very different strategy from last. With a stronger economy UK bonds look less attractive while gilts and overseas debt present opportunities to bond investors

The UK corporate bond market enjoyed a strong run in 2003 but is likely to find little support from economic news this year. We believe this is a good time for investors to review their UK corporate bond portfolio, to make sure the investment strategy is appropriate for the more challenging investment environment we are likely to see this year. In a sense, the bond market has become a victim of its own success. With the return of confidence to the market, the flow of investment into the asset class has increased, pushing the price higher and bringing the yield down to levels which are very...