Buying GILTS and holding to maturity in an ISA with Interactive Investor

valiant24

Aminatidi said:

Yes but keep in mind the capital gain is free whilst the coupon may attract tax. It's why low coupon gilts are popular right now.

Why "right now"?   Wouldn't low-coupon gilts always be popular with individual investors for this reason?

Aminatidi

Probably.

I've only just started paying any attention to them for that exact reason and thought the low coupon issues were a relatively new thing.

masonic

valiant24 said:

Aminatidi said:

Yes but keep in mind the capital gain is free whilst the coupon may attract tax. It's why low coupon gilts are popular right now.

Why "right now"?   Wouldn't low-coupon gilts always be popular with individual investors for this reason?

No, only during times when they are trading at a large enough discount to offer a sufficient tax exempt capital gain. Few would have been interested a few years ago when the low coupon made up most of the total return.

Nardy

JamTomorrow said:

I haven't held GILTS directly previously and have invested in Bond funds.

Now looking for some short-term certainty on return on some of my holdings in an ISA with II and want to check my thinking is correct.

From reviewing data at Tradeweb it looks like the GILT below has a ~5.2% yield if I hold to maturity on 7th September 2024.

Is it just as simple as I purchase that ISIN code (GB00BHBFH458) on II and hold to maturity and in just under 13 months time I would have secured a return of ~5.2% (unless Govt goes broke)?

Thanks.

I know little about Gilts and so I am puzzled by the Yield above compared with the.2.818% the following H&L page.

https://www.hl.co.uk/shares/shares-search-results/t/treasury-2.75-07092024-gilt

masonic

Nardy said:

JamTomorrow said:

I haven't held GILTS directly previously and have invested in Bond funds.

Now looking for some short-term certainty on return on some of my holdings in an ISA with II and want to check my thinking is correct.

From reviewing data at Tradeweb it looks like the GILT below has a ~5.2% yield if I hold to maturity on 7th September 2024.

Is it just as simple as I purchase that ISIN code (GB00BHBFH458) on II and hold to maturity and in just under 13 months time I would have secured a return of ~5.2% (unless Govt goes broke)?

Thanks.

I know little about Gilts and so I am puzzled by the Yield above compared with the.2.818% the following H&L page.

https://www.hl.co.uk/shares/shares-search-results/t/treasury-2.75-07092024-gilt

The higher yield figure represents the Yield To Maturity, which takes into account both the income and capital gain payable over the remaining lifetime of the gilt. HL's figure only takes into account the income.