Strong end to a good year for bond market

With the bond market traditionally robust in the fourth quarter, I am expecting a strong finish to w...

With the bond market traditionally robust in the fourth quarter, I am expecting a strong finish to what has already been a good year for corporate bonds. Fourth quarter gilt returns have not been negative for over 20 years, nor have corporate bond returns since records began in 1991. So what accounts for this year-end strength? Life funds are heavy bond investors in the fourth quarter. As bonds are less capital intensive than equities, increasing their weightings boosts reported solvency ratios. The most watched date in the UK bond market is 7 December, the single biggest coupon payment da...