Sovereign debt: The extreme cost of diversification

SOVEREIGN DEBT

clock

Skandia Investment Group's head of research and portfolio manager Adam Smears (pictured) discusses the implications of record low 'safe haven' bond yields.

Recently UK yields have moved below 1.8% as the market remembered the unresolved issues in the eurozone. These yields are at historic low levels, and the question is why? 1.8% is not a lot given inflation is growing at 3.5% - you would be better off heading into your local Tesco, buying a basket of goods with your savings and selling it on (just remember to freeze the perishables!). Gilt yields are at all-time lows and definitely do not represent good value, so why are they at this level? Clearly, there are not many places to store your money that are safe in the event of a messy end in ...

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

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
Fixed income investment set to rise as bonds hit double digit growth in asset allocation

Fixed income investment set to rise as bonds hit double digit growth in asset allocation

Assets in fixed income up 11%

Patrick Brusnahan
clock 19 June 2025 • 3 min read
US GSS bond issuances falls to lowest level since 2017

US GSS bond issuances falls to lowest level since 2017

Down 25% amid political turmoil

clock 13 May 2025 • 3 min read
Trustpilot