Investment grade bonds beating gilts

By Stuart Steven, associate director of bonds at Legal & General The past year has seen investment...

By Stuart Steven, associate director of bonds at Legal & General The past year has seen investment grade sterling bond indices outperform equivalent gilt indices by unprecedented levels across both the entire maturity spectrum and credit rating bands. Over-10-year corporate bond indices have outperformed the equivalent gilt indices by around 5% during 2001, according to UBS Warburg Indices. Within this, there have been winners and losers. Banks were one of the best-performing sectors, with an excess return of around 10% over gilts while cyclical sectors underperformed them. ...