City in shock as £1.3 trillion is wiped off value of UK bonds in record sell-off

Michiel Willems

More than £1.3 trillion has been wiped off the value of UK bonds since the start of 2022 following a major sell-off across bond markets, according to new figures.The value of UK corporate bonds has fallen by £514.5bn since the beginning of this year.© Provided by City AM

Just over £882bn has been wiped off the value of Gilts and Index-linked Gilts, which have fallen 26.4 per cent and 36.2 per cent respectively in the year to date.

In addition, the value of UK corporate bonds has fallen by £514.5bn since the beginning of the year, asset manager Collidr shared with City A.M.

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“The unprecedented meltdown in bonds is not just causing issues for pension funds with exposure to Liability Driven Investment Strategies. The fall is also wrecking the returns for any investor with a large exposure to UK bonds,” explained Colin Leggett, Investment Director at Collidr.

“Considering bonds have been a cornerstone of many ‘conservatively’ run fund strategies, like the archetypal 60/40, many fund managers are suffering in this unprecedented unwind of UK bond positions.”Colin Leggett

“Few individual fund managers have actually experienced a fall in the bond markets on this scale,” Leggett added.

“Many may have been caught out by the speed and aggressiveness of the sell-off and some have been slow to slash the allocation to longer duration bonds.”……more here

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