As govt bond yields dry up, central banks ramp up their risk taking

Central banks have earmarked an average of about 14 per cent of their assets for non-traditional investments, a survey showed

Central banks are ramping up their risk taking.

The days of plain old bonds and gold are over as central banks bet some of their trillions of dollars of foreign reserves on mortgage-backed securities, corporate debt, equities and emerging-market debt.

“Central bank reserve managers typically wake up in the morning figuring out how to avoid losing money,” said Alex Millar, head of EMEA sovereign and institutional sales at Invesco Ltd. But now, "the requirement for return is creeping up.”

Government-backed agencies have traditionally focused on preserving capital. However, with some government-bond yields having slumped below zero, generating a return has become a bigger