Buy side takes sceptical view on ultra-long gilts

The UK Government auctioned the first 50-year gilts last week, but fund managers are generally cauti...

The UK Government auctioned the first 50-year gilts last week, but fund managers are generally cautious on the long end of the market, particularly this ultra-long variety. Helen Roberts, head of government bonds at F&C, says that although the auction of the 50-year bond, the longest in four decades, is expected to go well in the short term, high demand at the long end means that the UK yield curve is currently inverted. "Investors are getting precious little extra yield for investing for longer," she says. "We believe the UK gilt curve needs to normalise to provide real long-term value ...