Bank of England: hedge funds and mutual funds have an information advantage in UK gilt trading

Informed trading in government bond markets
Robert Czech, Shiyang Huang, Dong Lou and Tianyu Wang

Government bond yields serve as a benchmark for virtually all other rates in financial markets. But what factors drive these yields? One view is that yields only move notably when important news hit the market, for example monetary policy announcements. Others suspect that some investors have an information advantage due to their access to costly information (e.g. data providers) or more accurate interpretations of public information. In a recent paper, we show that two investor groups – hedge funds and mutual funds – have an information edge in the UK government bond (gilt) market, and that these two investor types operate through different trading strategies and over different horizons.

The full article is available at https://bankunderground.co.uk/2020/09/15/informed-trading-in-government-bond-markets/

Related Posts

Previous Post
BNP Paribas creating DAML apps as APAC settlement goes blockchain
Next Post
State Street Survey Finds Firms Unprepared to Comply with Uncleared Margin Rules Despite Deadline Extension

Related Posts

Fill out this field
Fill out this field
Please enter a valid email address.

Menu
X

Reset Password

Create an Account