Insurance companies and pension funds sold gilts at the fastest rate in over a decade in the first quarter of 2012, according to figures published by the Office for National Statistics today.
The first three months of the year saw fund managers sell £9bn of gilts - the highest quarterly disinvested since the third quarter of 2001. This contrasts with 2011, when the net investment in gilts was generally flat and 2010 when there was record investment of £29bn.
Gilt yields have tended to fall since 2008 and the ONS noted that, while representing a risk-free investment, the low returns could be causing fund managers to switch in and out of gilts.
The total net investments made by institutional investors in the first quarter are estimated to have been £34bn - substantially higher than the 2011 average of £14bn a quarter and the highest quarterly level of net investment since the £38bn invested in the second quarter of 2009.
Investment in short-term assets - those maturing within one year of their originating date - was estimated to be £24bn. This was the highest level since records began in 1983 and, the ONS said, 'may be evidence of how institutions are restructuring their investment portfolios'.
Particularly high levels of net investment were recorded by self-administered pension funds, which invested £20bn in the first quarter of 2012. This was the highest quarterly level since records began, and was £12bn higher than the estimate for the previous quarter. A 'significant increase' of £16bn in employer contributions during the quarter may have contributed to the figure, the ONS noted.