Low Coupon Gilts Opportunity

July 2023

It would not surprise anyone that short-dated UK Government Bonds (‘Gilts’), Cash and Money Market securities have not been held to any great degree across our multi asset portfolios in more than a decade. These defensive bonds have not provided much in the way of positive real returns over any meaningful periods and inflation is currently at its highest point in decades. Why then, do we see a real opportunity to invest in this sector, particularly Gilts? The answer lies in both what happened last year, and what our expectations are for the year ahead. Whilst we are cautiously optimistic, the recent deployment of an army of mercenaries in Russia demonstrates that we are currently living in a fast-moving world where the outlook changes rapidly.