Corporate bond sector is outperforming UK gilts

With low UK Government bond yields, corporate bonds have been an increasing point of focus, according to director of corporate bond management at Rothschild Asset Management, Lucy Speake. In the 12 months to the end of July, the UK Gilt sector showed an average return of just 0.2% compared to 3.7% from the UK Corporate Bond sector. Looking at non-government yields relative to government bond yields is instructive, says Speake. 'While swap spreads have tightened significantly led by the fall in interest rates and the underperformance of long dated gilts relative to shorter maturities, ...