There's a 'Negative Feedback Loop' Bedevilling U.K. Pension Funds
How pension funds and insurers could further bid up U.K. government bond prices.
An elderly pedestrian holds a walking stick, featuring a pattern of a British Union flag, commonly known as a Union Jack, in London, U.K.
Photographer: Chris Ratcliffe/BloombergThis article is for subscribers only.
Government bonds are a bigger trap than you might think for yield-hungry long-term investors.
U.K. pension funds and life insurers could be hit with a double whammy of pain as ultra-low government bond yields intensify funding shortfalls and spur investors to match their ballooning liabilities with longer-dated assets, creating further demand for sovereign debt and pushing yields even lower.