M&G's Riddell: Why we hiked index-linkers to record high

M&G bond manager Mike Riddell and his team have taken exposure to global index-linked bonds to their highest ever levels in the view inflation risks have not been priced into the market.

Speaking at Investment Week's Cape Town Senate Conference, Riddell described linkers as 'incredibly cheap' given the team's concerns about inflation rises in the future. As a result, they have raised weightings in inflation-linked issues to around 45% of the Global Macro Bond fund, up from 37.5% at the start of February, while exposure in International Sovereign Bond is now around 40%. Riddell said real yields still have much further to fall as governments use financial repression to force down nominal yields and inflate their way out of serious debt problems. "The market is pricin...