Ecclesiastical's Hepworth warns on gilt bubble

Ecclesiastical's Robin Hepworth has warned gilts are ‘in a bubble' and should be avoided by investors looking for returns over the medium term.

The top performing equity and bond fund manager, running Ecclesiastical’s Higher Income fund, said with yields well below the rate of inflation and more QE on the way, gilts offered investors a poor return. Hepworth said: “I think gilts are in a bubble. Yields are at 300-year lows effectively, with 10-year gilts yielding below 2%, and inflation well above that. “Certainly in our medium term view, gilts look very poor value and they are very expensive.” Hepworth’s comments mirror those of a number of other fund managers, including M&G’s Richard Woolnough and Peter Geikie-Cobb at Thames...