Bull run in gilts ‘on course to derail'

The UK government bond bull run is ‘overdone' and set to derail, with yields rising from their historic lows as investors struggle to find value in the space, managers say.

During the past month investors have been flocking to gilts in an attempt to shield their assets against the heavy market sell-off, tapping into the debt’s safe haven status. The IMA’s gilt sectors were two out of just three sectors to have generated a positive return over the three months to 12 August, with UK Index-Linked Gilts returning 5.6%, while UK Gilts delivered 4.6%, according to Morningstar. Managers have warned this strong run is overdue a correction, as fears grow that the space is too expensive. Ian Spreadbury, who runs the £704m Fidelity Strategic Bond fund, warned g...