Institutional investment is moving towards gilts

Aberdeen is favouring shorter-term gilts in the belief they offer a better risk/reward trade-off tha...

Aberdeen is favouring shorter-term gilts in the belief they offer a better risk/reward trade-off than the longer-term part of the gilt market. Rod Davidson, head of global fixed income at Aberdeen, is keen on gilts, including those at the two-year end of the market, which are yielding around 4.75%. He is not favouring 30-year gilts, currently on a yield of 4.7%, as he feels the yield curve continues to be inverted. The fact the Government will be looking to issue more long-term gilts is a negative, he adds. Davidson is preferring to hold gilts at the shorter end of the curve, which ...