Govt bonds rally as equities hit new low

By John Pattullo, a fund manager at Henderson Global Investors Government bond markets have rall...

By John Pattullo, a fund manager at Henderson Global Investors Government bond markets have rallied sharply over the past month as growing concerns about companies' accounting practises drove equity markets to five-year lows and encouraged investors to seek safety in more stable asset classes. However, they may be vulnerable to a continued improvement in global growth in the second half of the year. Consequently, we have shorted our gilt portfolios' duration (interest-rate sensitivity), although we believe the recovery will be sluggish and interest rate increases limited. The ...