Vanguard, Royal London Buy Gilts as Budget Spurs Bond Rally

Vanguard Group Inc. and Royal London Asset Management Ltd. bought gilts on Wednesday as UK Chancellor of the Exchequer Rachel Reeves’ budget largely won favor with markets, sparking the biggest rally in longer-dated bonds since April.

Like many of his peers, Vanguard’s Ales Koutny had trimmed his gilt holdings in the run-up to the budget in anticipation of higher volatility. But he said he was back to buying 30-year bonds on Wednesday after Reeves used her statement to hike taxes and firm up the UK’s fiscal position. He said he may increase his exposure further still, seeing current prices as overly pessimistic.