Spreadbury anticipates UK yield curve changes

fidelity bond manager spreadbuRy is favouring longer-dated bonds

Fidelity bond manager Ian Spreadbury is favouring bonds with seven to 10 years' duration, anticipating some significant changes to the shape of the UK yield curve on a 12 to 24-month view. Spreadbury believes the UK yield curve is far too flat and should be a similar shape to that of its counterparts in Europe and the US, with greater yield available on longer-dated bonds. He said the shape of the UK curve was a legacy of Britain's previous period of high inflation which meant short rates were kept high. This has been coupled with demand at the long end from institutions. He added: "The...