31st January 2012
The European government bond market has been relatively stable over recent weeks, despite the recent downgrade of a number of eurozone economies by Standard & Poor.
According to George Henderson, manager of the Royal London Global Index Linked Fund, the fact the current absolute ten-year yield has breached the psychologically important six per cent barrier means that the markets continue to remain stable.
He commented: "I suspect the 'pain trade' is for risk assets ... either as investors have positioned themselves for a fall in risk markets, or remorse as they have missed the 'buy' opportunity of their careers."
He added that many investors will continue see government bonds as an excellent prospect for some time to come.
The news follows figures released by Lloyds TSB, which showed UK bonds have been the best-performing asset for British investors over the last 12 months.
Returns of 13.5 per cent were witnessed during the course of 2011, putting this asset class comfortably ahead of other investment options.
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