Woolnough: Gilts now best value ever versus bunds

Anna Fedorova
clock

UK gilts are the best value they have ever been compared to German bunds, M&G's Richard Woolnough has said.

The manager (pictured) of the £22bn Optimal Income fund has employed a negative duration trade in Europe, as spreads between 10-year UK gilts and 10-year German bunds widened to as much as 150bps. "This is the best value you've ever had to own UK bonds vs German bonds," he said. "The 10-year UK yield is now nearly 1.5% higher than German core bonds, and that's attractive to us historically." Woolnough said he is playing the disparity by selling down duration risk in Europe compared to the UK and the US. "We are negative duration in Europe as we think the market is pricing in too...

To continue reading this article...

Join Investment Week for free

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

More on Bonds

Almost all investors and wealth managers plan to increase high yield focus in next two years

Almost all investors and wealth managers plan to increase high yield focus in next two years

Stock market correction expected

Sorin Dojan
clock 07 July 2025 • 1 min read
Global ESG backlash has not eroded demand for UK green bonds

Global ESG backlash has not eroded demand for UK green bonds

This year's auctions oversubscribed

Sorin Dojan
clock 03 July 2025 • 4 min read
Federated Hermes launches Global Short Duration Bond fund just as asset class booms

Federated Hermes launches Global Short Duration Bond fund just as asset class booms

Responding to ‘increased investor demand’

Eve Maddock-Jones
clock 25 June 2025 • 2 min read
Trustpilot