L&G confident on govt bonds

group predicts further rises in govt bond yields but does not foresee a fixed interest collapse

Legal & General Investment Management (LGIM) predicts further rises in government bond yields, but does not think a wholesale collapse in fixed interest is on the way. The group is factoring in a fair yield for long-dated US Treasuries of 5.25%-6%, against 4.75%-5.25% for equivalent duration gilts and 4%-4.5% for Bunds. As such, it expects German government bonds to be the best performers, followed by the UK and then the US. Andrew Clare, chief economist at LGIM, said there is still substantial excess productive capacity in the US and developed economies. As such, he suggested economic ...