Managers return to gilts as 3% yields signal buying opportunity

Multi-asset managers are finding renewed opportunities in UK government bonds as they try to eke out value for their portfolios at the start of 2014.

Signs of a strengthening UK economy pushed benchmark 10-year gilt yields back towards the 3% mark in Q4 2013 and at the start of this year, signalling a buying opportunity for some portfolios. Invesco Perpetual’s multi-asset team, led by former GARS managers Richard Batty (pictured), David Millar, and Dave Jubb, have moved long gilts as part of a pair trade in their Global Targeted Returns fund. David Coombs, head of multi-asset at Rathbones, has begun reintroducing 10-year UK government bonds back into his portfolios, and said he would keep buying if yields continued to rise. Else...