Bond star Hodges: Why I am buying UK banks

Legal & General Investment Management's Richard Hodges has been buying into UK banks' subordinated bonds as well as boosting his exposure to government debt.

Hodges, the top performer in the IMA Strategic Bond sector over the last three years, has almost 30% of his £1.8bn Legal & General Dynamic Bond trust in financials, with holdings including Lloyds, Barclays and Royal Bank of Scotland. He believes in the event of another credit crisis UK banks will be quicker than their European counterparts to write mark-downs and raise capital through equity markets. "I favour subordinated bonds issued by stronger, well-capitalised banks that are expected to be repaid imminently," said Hodges. "Bank bond prices have fallen from around 90% of par i...