Help with investing in UK Gilts

incus432

ali_bear said:
What are the advantages of buying into an ETF that is invested in Gilts/bonds, apart from diversification? 

Ease of buying and selling possibly. But the downside is that prices can crash and you lose a lot - like many of us did in 2022. This is very different from a bond held to maturity when you know you will get the face value back

poseidon1

incus432 said:

ali_bear said:
What are the advantages of buying into an ETF that is invested in Gilts/bonds, apart from diversification? 

Ease of buying and selling possibly. But the downside is that prices can crash and you lose a lot - like many of us did in 2022. This is very different from a bond held to maturity when you know you will get the face value back

Important to emphasise   2022 would have given rise to paper losses of some magnitude, but no actual realised losses if you chose to hang on and stay the course. 

One of my global bond fund holdings had dropped by 20% in 2022, but now sits at 5.64% 'loss' so it has been recovering satisfactorily from its low point. I have the income units, so what was important during this volatile period was that the level of income distributions should remain undiminished which has proven to be the case.

Indeed during its very low point, I bought a small allocation of the fund for mother's ISA. She now sits on a bit of a capital gain and much improved income over her bank deposit.