With government bonds, the returns are paid on a fixed schedule, which can be indexed to inflation to protect investors from fluctuations in consumer prices (index-linked bonds). These sorts of investments provide more predictable but potentially lower returns than equity investments.
Our main Government bond portfolio is valued at around £13.8bn. This includes both UK and overseas bond markets, in particular the US. In 2016, we took on responsibility for a portfolio of sovereign bonds issued by emerging countries. We follow a research and valuation-led investment process to guide our expectations for bond returns.