Nomura Asset Management has been snapping up U.K. government bonds as their yields look more attractive compared with other European countries.
¡°Within Europe, U.K. debt is the most compelling option to invest,¡± Yuji Maeda, head of global fixed income investment at the $646 billion firm, said in an interview in Tokyo, adding that the Bank of England has been ¡°taking its time¡± to cut interest rates. ¡°Given that gilts still offer a yield over German Bunds, the U.K. looks easier to invest when compared with a country like France.¡±
Despite a tumble in gilt yields this month, the 10-year maturity is yielding about 4.4%, making it appealing for investors in Japan, where domestic bonds of the same maturity are offering around 1.6%. Nomura is not the only Japanese asset manager positive on the bonds, with Amova Asset Management also holding a slight overweight.
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