Gilts outflanked on all sides

Article Abstract:

United Kingdom government securities (gilts) have seen a flatter yield curve and this could mean that gilts will perform well. Equities are likely to perform better, however, and a drop in gilt yields does not mean that they are a better investment than equities. Gilts are not as attractive as cash for investors who want security, and they are not as attractive as equities for investors seeking returns. They could perform better than equities if there is a mass exodus from equities as occurred in 1987.

Government Bonds

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Gilts and earnings fight for equities' future

Article Abstract:

Pound sterling has risen in value in relation to other currencies in Europe and this has led more economists to cut government securities' (gilts') yield forecasts. This may not boost share prices in itself. UK interest rates could still rise by some 1.5% despite the strength of the pound. This could result in UK investors lacking enthusiasm for gilts. A rise in the value of the pound could also reduce profit growth and this would hit share prices.

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Valuations a matter of gilts

Article Abstract:

Covariances between British government securities and stocks are examined in detail, as are changes, which mean that covariances are low.

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