Still into gilts? Three funds on our radar

A period of exceptionally strong returns from gilts has seen the FTSE UK Gilt All Stock index up 7.4% per annum during the past three years to the end of January 2013. With the yield on the 10-year gilt now trading in a close range around 2%, the gilt sector is proving to be controversial. This has raised a dilemma for fixed income fund managers as they try to balance risk and reward within their portfolios. Indeed, a number of managers we speak to have been trying to mitigate the risk of capital losses should government bond yields rise significantly. Following the recent news tha...