Gilts were the only asset to do well in the credit crunch.
"So it could be a while yet before we reach calmer waters." So, how do pension scheme managers reduce the risk to their funds at a time when the traditional safe haven of
gilts is not a viable option because of such low yields?
27 July 2010 - Goldman Sachs (NYSE:GS), Deutsche Bank (ETR:DBK), HSBC (LON:HSBA) and the Royal Bank of Scotland (LON:RBS) have helped UK Debt Management Office (DMO) sell GBP6bn (USD9.3bn/EUR7.18bn) in index-linked
gilts, Reuters reported.
Naturally, the curious
gilts all fussed around her when she first arrived and had a good old sniff.
Investors have clearly taken fright, and while the Bank of England's programme to buy
gilts offers some support in the short term, it is only a temporary fix: when the Bank decides to exit this programme it, too, will become another major source of
gilts for quite some time.
Announcing a quantitative easing programme, the bank had said that it would spend GBP75bn purchasing
gilts and other assets with newly created money to combat recession, and that the bulk of the amount would be spent on
gilts.
19 April 2010 - Indian credit rating agency CRISIL kept at P1+ the rating on the INR2.5bn (USD56m/EUR42m) short-term debt (STD) programme of local financial investments company PNB
Gilts Ltd (BOM:532366).
Chris Impey, from Tonyrefail - who won Pig of the Year 2008 with one of his Berkshire
gilts - collected champion Berkshire, male and female breed champion, and reserve traditional breed champion.
Corporate bonds, due to the economic uncertainty and therefore the possibility of default, have a significantly higher yield over similarly dated
gilts. To reduce the risk with the potential loss of some control over redemption, a good corporate bond fund can offer an attractive rate of interest at around 5.5 per cent gross and reasonable liquidity.
The Debt Management Office (DMO) - which sells the
gilts to raise money on behalf of the state - said it had failed to attract enough bidders for its latest issue.
The Bank of England's strategy of printing more cash and buying back
gilts may have helped improve asset prices in recent weeks but also had a distorting influence on pension liabilities, the firm said.
The DMO was selling pounds 1.75bn of Treasury
gilts maturing in 2049, but attracted bids worth just pounds 1.63bn.