The outlook for government bonds

Guilhem Savry, head of macro dynamic allocation at Unigestion says: “Low government bond yields are a reflection of the real world.

"The outlook for inflation is very weak, and we may even get deflation, in which case the attractiveness of government bonds increases.

"If the Macroeconomic outlook gets worse from here, then a government bond investor will make a capital gain, while the more traditional reasons to own government bonds, the income payment and the diversification, still work.

"We prefer US government bonds as the income yield is higher right now.”