Retail savers advised to avoid cash

Professional Adviser
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Fund manager's comment/Anna Lees-Jones

Second quarter consolidation in bond markets has pushed yields to levels that should appeal to income-conscious and defensive investors. The yield on the 10-year benchmark UK gilt has risen from 4.5% to 5.3% since the end of March. Investment grade corporate bonds still yield more than their gilt equivalents, but, thanks to the continuing narrowing of spreads, their performance has been more resilient. As a rule, we believe the sensitivity of a portfolio of investment grade corporate bonds is around 80% to inflation/interest rate expectations and 20% to the fortunes of the companies issu...

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