Investments  

Index-linked gilts top of the pops for 2014

Index-linked gilts top of the pops for 2014

Index-linked gilts were the best performing asset class of 2014, according to data from Baring Asset Management, despite the low interest-rate environment in the UK, US and Europe.

Last year they returned 21.4 per cent for investors compared to hedge funds, the worst performing asset class, which returned -0.5 per cent.

The North American equities market performed strongly again, returning 19.6 per cent while European and UK equities were among the worst performing asset classes.

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Marino Valensise, head of Barings’ Global Multi Asset Group and chairman of the strategic policy group, said: “Comparing and contrasting the US position with those in Europe and Japan, it is clear how diverging situations are in place: currency strength vs currency weakness, monetary tightening vs monetary easing.”

Statistics:

■ Index-linked gilts – 21.4 per cent

■ North American equities – 19.6 per cent

■ UK equities – 1.2 per cent

■ Hedge funds – -0.5 per cent

Adviser view

Bob Wilson, a director at Norwich-based GreenSky Wealth, said: “The performance of index-linked gilts has been quite surprising and there is a bit of a bubble being built up there.

“We are in an unusual scenario and people are looking for somewhere cautious to put their money with interest rates so low.”