Gilt Service
Our gilt service is designed for clients who are seeking a low-risk, short-term yield strategy, investing in government backed securities.
Investing in Gilts?
Our gilt service provides a balanced approach to capital preservation and potential returns for investors seeking a secure and attractive investment option.
The strategy behind our gilt service involves investing in a diversified selection of gilts, with varying maturities. This approach aims to provide investors with liquidity as the gilts mature.
By investing in gilts with low coupon payments, there is the potential to achieve a greater net return on short term liquidity due to gilts being free from capital gains tax for individuals.
While the standard service would invest your monies equally between four gilt issues maturing roughly six months apart, the service is able to cater to your specific circumstances as investors are able to hold as many or as few gilts as they wish.
With our focus on monitoring market conditions and managing risks effectively, we aim to deliver a prudent investment service for our clients.
By investing in gilts, you will benefit from:
• A higher net return than cash in the bank
• Liquidity
• Capital preservation
• Low risk
• Reinvestment if appropriate
What is a gilt
A gilt is a type of loan issued by HM Treasury and listed on the London Stock Exchange.
A conventional gilt is a liability of the government under which it guarantees to pay the holder of the gilt a fixed cash payment (coupon) every six months until the maturity date, at which point the holder receives the final coupon payment and the return of the principal. For example, a gilt with a 2% coupon will pay £2 interest per £100 of gilt.
Frequently Asked Questions
A bond is a fixed-income investment representing a loan made by an investor to a borrower, such as a company or government. In return, the investor usually receives a fixed rate of interest, before the bond is redeemed after a set period of time. A gilt is simply a bond issued by the UK government, meaning it represents a UK government liability.
Gilts are named as so, due to the perceived security of the investment. The British Government has never failed to make interest payments or principal payments on gilts as they fall due.
No, a gilt can simply be sold in return for Great British Pounds should the need arise, such as due to a change of circumstances or to pay a tax bill. An advantage of gilts is that they are liquid, which means that usually they can easily be converted to cash without losing much value.
However, if a gilt is not held until maturity, an investor won’t benefit from the total potential return on the investment, so it is advisable to hold gilts to maturity if possible.
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Please note:
This information is for educational purposes only and should not be used to make a decision about the suitability or otherwise of a specific investment strategy. No investment is suitable in all cases and if you have any doubts as to an investment’s suitability then you should contact a professional adviser. The value of investments and any income from them can fall, as well as rise, and you may get back less than you invested. Your capital is therefore always at risk. It should be noted that stock market investing is intended for the longer term.
The information contained within this website is subject to the UK regulatory regime and is therefore primarily targeted at consumers based in the UK.
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