Equities edge out bonds for value

Fund manager's comment

Bond investors have fared well over the past two years. Concerns about global growth have driven up ...

Bond investors have fared well over the past two years. Concerns about global growth have driven up gilts, and a thirst for yield has fuelled even stronger gains in investment-grade and high-yield corporate bonds. The question is how much further can they go up? Gilts could come under pressure if the Bank of England decides to raise interest rates again. But despite retailers' disappointing Christmas, the housing market slowdown and manufacturers' bruising from sterling's rise, the economy is still close to full capacity. With an unemployment rate of just 4.7%, the labour market is tight...