The flaw in my Gilt logic

valiant24

Would someone please be able to indicate where I have gone wrong below?

I just bought 10,112 T24 gilts (UNITED KINGDOMGOVERNMENT OF 2.75 GILT SNR BDS 09/24 GBP1000 REGS). 
"Consideration" was (10112 x 97.668) =  £9,876.19
With £5 commission, the actual price I paid was £9,999.07.  I think that reflects that a dirty price was paid as interest is due soon.

All good.

Now, I will get (0.275% x 10112)=£278.08 interest on 30/09/23, 31/03/24 and 30/09/24.
So that's a total of (3x278.08)=£834.24 interest.  I'll also get £10,112 capital back on 30/09/23, so a total return of (824.24+10112)=£10964.24.

(10964-9999.07-5)=£952.17 "profit", or about 9.5% in just over 13 months.
That can't be right, can it?!

Cold_comfort

The 2.75% coupon is an annual rate. Each half-yearly coupon payment will be half of 2.75% x 10,112 = £139.04

Malthusian

As per Cold_comfort. I make it a 5.3% return over the 13 months. Sharecast.com puts the annualised gross redemption yield at 5.06% which sounds about right. And not great value when you can get 6% from a retail one-year deposit (albeit without the ability to sell during the term, possibly at a capital loss) or 5.7% from a one-year cash ISA.

valiant24

Cold_comfort said:

The 2.75% coupon is an annual rate. Each half-yearly coupon payment will be half of 2.75% x 10,112 = £139.04

D'Oh!  Of course!   About 5.35% then.  Thanks both.