The allure of gilts shows no sign of fading in the eyes of UK investors, according to recently published market data.
According to investment platform interactive investor (ii), gilts, bonds issued by the UK government, attracted more cash than any other asset class for 10 straight months.
One UK government bond (TN25), issued in summer 2021, has seen the highest net flows of any investment available on the ii platform since June 2023.
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The assets held in the gilt have risen 28-fold since the first quarter of 2023.
Gilts with low coupons and maturing soon are attracting more cash than popular active and passive funds, according to ii data.
“It may surprise many to see that it is not a popular fund, investment trust, ETF, or share that has been attracting the most cash since last summer,” said Sam Benstead, fixed income specialist at ii.
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“But it makes a lot of sense that TN25, alongside other gilts maturing soon, have seen a huge amount of cash flow into them.
“First, gilt yields hit a recent peak last summer, at around 5%, causing many investors who had steered clear of bonds to pay attention,” said Benstead. “That kickstarted flows into the asset class.”
