Where to invest when the going gets tough

How floating rate notes could help UK equities

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Sam Liddle of Church House Investment Management
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Sam Liddle of Church House Investment Management

The yield on UK 10-year government bonds – often referred to as the risk-free rate of return – recently sank to below 0.5%, its lowest level on record.

The milestone serves as an excellent summary of bond market conditions since the Global Financial Crisis, wherein central banks have slashed rates and bought government bonds in bulk to enhance their respective national economies. Three protective offerings for absolute return sector sceptics This approach has pushed gilt yields down, forcing investors to chase income in other areas - for example, corporate bonds, property or equities - all the while adding additional risk into their portfolios. Against a backdrop of record-low interest rates, excessive risk-taking has not necessar...

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