The UK 10-year gilt yield fell below 3.5% yesterday as investors continued to move out of the troubled eurozone.
Government bond yields have continued to dive today as ‘fear' grips global risk assets.
The Bank of England is sitting on an £8bn net profit from its £200bn quantitative easing programme.
Henderson head of retail fixed income John Pattullo provides his view on a volatile few weeks for bond markets and why he expects to see jittery gilt auctions.
Overseas investors piled into UK gilts in February and March, buying up £28bn worth of assets - more than the inflow for the whole of 2009, according to the Bank of England.
Fund managers fear strong near-term pressures on gilts and sterling after the market reacted poorly to a hung parliament last week.
Paul Brain plans to increase his allocation to developed market sovereign debt in his Newton Global Dynamic Bond fund from 5% to 30% over the next few months.
Aberdeen has been buying into gilts over the past two weeks on optimism the UK will keep its AAA credit rating and sterling will hold firm.
Baptism of fire sees UBS Global Allocation manager Andreas Koester deliver top-quartile returns through sharp market correction