Old Mutual: bond investors to benefit from government borrowing

Stevens, who manages the Global Strategic Bond fund, pointed out that, as a result of the Government's direct investment in the banking system, it is having to borrow more by raising extra funds through new gilt issues. "In a market full of forced sellers, the Treasury is offering new issues at more attractive yields than is dictated by economic fundamentals," he said. "This presents us with interesting potential opportunities, particularly as it comes after an unprecedented 'flight to quality' in September which resulted in yields on very short dated government bonds falling to 0pc. T...