Investors reluctant to take profits despite soaring global bond prices

London

GLOBAL bond prices have soared in the past 12 months but pension funds, insurance companies and other investors have been reluctant to take profits.

The most fascinating example in the past week was the reluctance of institutions to sell bonds to the Bank of England (BOE) which had begun another quantitative easing (QE) programme of gilt (UK sovereign bond) purchases. The result was that bond prices jumped and yields on 10-year bonds tumbled to just over 0.5 per cent, a record 300-year low.

McKinsey Global Institute estimates that the global stock of sovere…