Gilt funds soar as QE narrows yields to historic lows

Gilt fund returns are set to continue soaring in the coming months after a number of vehicles climbe...

Gilt fund returns are set to continue soaring in the coming months after a number of vehicles climbed upwards of 8% over the week leading into the first quantitative easing purchases. Expectations the Bank of England will not be price sensitive in its gilt buys has sent the 24 funds in the IMA Gilt sector skyward, up 4.83% over the week to 11 March, the day of the first £2bn reverse auction. Last Wednesday's first auction was 5.25 times subscribed, with the market offering to sell £10.5bn. The sharp price rises has led gilt yields to plummet, with the benchmark 10-year gilt yield divi...