Government bonds still useful for reducing risk

UK and US government bond prices are trading above fair value on a historic basis but Axa Investment Managers is still using them to reduce risk in portfolios. Nigel Richardson, senior strategist for the group, believes US government bond yields are below long-term fair value but has increased his weighting in the asset class as he feels they offer increased compensation against global growth risks. The main change to asset allocation in the group's funds was a reduction in the underweight position in government bonds in May in response to a rise in yields in April. The reduced underwe...