Subordinated debt sounds positive note for UK bonds

With spreads narrow in the UK credit market, preference shares and subordinated bonds from financial...

With spreads narrow in the UK credit market, preference shares and subordinated bonds from financial firms are providing a source of attractive low-risk rewards, according to managers. Jonathan Platt, head of fixed income at Royal London Asset Management, says the underlying picture is all bond yields have been rising since January. "However, the return on credit and government bonds has been broadly similar for the past six months," he adds. Platt points to investors' nervousness about risky assets and a resulting fall in liquidity. "Bond yields have risen while the equity markets have ...