Bad time to go on a gilt trip

Article Abstract:

UK government securities (gilts) provide a set rate of interest for a given period and then a lump sum repayment. Prices of gilts can change over time. Changes in gilt prices give clues as to where markets see the economy heading. Shares can provide capital growth, while gilts can provide income. The average annual income from gilts is 7% compared with 5% for shares, but total returns from shares is boosted by their price rise, which has been higher, giving higher average total returns.

Evaluation, Investments

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Broken records in the gilt market

Article Abstract:

United Kingdom government securities (gilts) have seen a drop in yields affecting long gilts, which has meant good returns for investors. German bonds have tended to benefit more than UK bonds from investors seeking a safe haven. Yields could drops further, and gilts may seem expensive in relation to some other assets such as cash. Long gilt yields have dropped below three-month deposits. Short-term yields could drop, but there is no certainty that this will occur.

Interest Rates, Government Bonds

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A gilt-edged lining to the inflation cloud

Article Abstract:

Index-linked government securities (gilts) offer UK investors protection against inflation for income and capital, though interest rates tend to be lower than for conventional gilts. Shares have tended to perform better than inflation, but involve risks, and the income they bring may not be high. Gilts also have the advantage of not being subject to capital gains tax, and the element of income related to inflation is not subject to income tax.

Tax planning

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