Gilt yields could remain at record lows for 'at least a year'

Hodges (pictured), who heads up the £1.6bn L&G Dynamic Bond trust, thinks gilt yields will remain at historic lows, even if the UK's coveted triple-A credit rating is downgraded in the first quarter of next year. Last month UK government bonds touched a record low of 1.407%, with the asset class seen by many investors as the ‘ultimate safe haven trade' to shield assets against the unresolved European sovereign debt crisis. The 10-year benchmark gilt yield ended trading yesterday at 1.5% and Hodges expects gilt yields to remain at these subdued low levels for at least another year. ...