Gilts to Lose Value in 2016 as Yields Rise

Ten year Government bond yields increased substantially in the US and UK in the last three months of 2015, what can investors expect this year?

Andy Brunner 6 January, 2016 | 9:34AM

This article is part of Morningstar’s Guide to Investing Ideas for 2016, click here to get your financial health in order with some new year’s resolutions for your portfolio.

December was another highly volatile month for government bond markets but one which saw 10-year yields rise in unison over the month, except in Japan. Disappointment with the European Central Bank’s limited expansion of monetary policy early in the month kick started a general sell-off lifting German 10-year yields by nearly 20 basis points to 0.68%, and those in the US and UK by 15 basis points, to 2.31% and 1.92% respectively.

US, UK and German bonds all produced negative returns in December but recorded modest profits for 2015

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About Author

Andy Brunner

Andy Brunner  is Head of Investment Strategy, Morningstar UK

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