Life industry changes hit long-dated credit yields

Allianz Dresdner's bond arm, Pimco, is predicting rising yields at the long end of the UK fixed inte...

Allianz Dresdner's bond arm, Pimco, is predicting rising yields at the long end of the UK fixed interest market. Michael Amey, portfolio manager at Pimco, says over the past two years there has been a large asset allocation shift in the UK life insurance industry away from equities into bonds. At a time when supply was relatively low, this was a big support for long-dated UK bonds, but supply is now rising as a result of deteriorating Government finances and weaker demand, Amey notes. For these reasons, Pimco is favouring the intermediate part of the yield curve and believes the best v...