Trading in gilts soared 75% in January 2025 compared to a year earlier, as investors took advantage of the spike in gilt yields, data from Hargreaves Lansdown has revealed.
The figure was almost double the amount in December 2024 and the highest for trade volumes since 2021.
Hal Cook, senior investment analyst at Hargreaves Lansdown, said: “It seems the opportunity presented by the spike in gilt yields in January was too good to miss for Hargreaves Lansdown clients. Both the number of trades and the amount traded were much higher than we’ve seen recently. These figures are the highest we have seen since 2021, overtaking previous peaks for number of trades in October 2024 and amount of assets in February 2024.”
The two and 10-year gilt yields spiked to around 4.6% and 4.9% in January respectively, before edging back down to 4.18% and 4.48%.
In addition, Hargreaves Lansdown said a specific gilt, which had been popular amongst retail clients, matured on 31 January.
Cook added: “Gilts owned directly are not subject to capital gains tax, and so this specific gilt had effectively offered most of its return tax free. With investors aware that the gilt was going to mature very soon, it’s likely many sold ahead of the maturity and reinvested in other gilts, given the spike in yields.
“We’re expecting February to be another popular month for gilt purchases, largely linked to the maturity of the gilt noted above on 31 January; many clients will have received their maturity payment last week and given continued elevated yields, reinvesting into another gilt may be attractive.”
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