Newton still positive on gilts as interest rates rise

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The expectation of further interest rate rises and increased gilt supply in the coming year is resul...

The expectation of further interest rate rises and increased gilt supply in the coming year is resulting in investors adopting a range of divergent strategies in regard to the asset class. The decoupling of the traditional relationship between base rates and the direction of the gilt market is clouding the asset allocation decision for many groups. Stewart Cowley, bond fund manager at Newton, says base rate rises are usually associated with a declining gilt market. But since the 50-point hike last November, yields have actually been falling, largely due to a belief rates will not keep ris...

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