Major fund managers including Invesco Ltd., Ninety One UK Ltd., Rathbones Asset Management Ltd. and W1M Group Ltd. are reported to have turned more cautious on UK government bonds this year. The shift reflects a weaker view on gilts as investors reassess the outlook for inflation and broader market risk in Britain.
According to the report, concerns about political instability are a key reason for the reduced appetite. Fund managers appear to be weighing how domestic politics can feed into bond-market volatility, especially at a time when inflation worries remain difficult to ignore.
Oil-related pressures are also part of the backdrop for this more defensive stance on UK debt. Higher energy-linked risks can complicate the inflation picture, making government bonds less attractive when investors are looking for stability and clearer policy direction.
The result is a move by some prominent asset managers to look beyond British government debt for opportunities. Their positioning suggests that, for now, parts of the market see UK gilts as more exposed to politics, inflation and commodity-driven uncertainty than some alternatives.
