Which gilt dealing service provides the best overall execution price for gilt trades?

Andreg

I am currently using HSBC Investdirect as an online broker to invest in gilts, mostly index linked gilts.

They provide a good service and generally the price I pay for gilts is somewhat better than the 'offer' price quoted by the LSE (London Stock Exchange).  They charge a brokerage fee of £40 per trade.

I wonder if there is a cheaper way to invest in gilts.  I am aware of the DMO's Purchase and Sale Service (PSS) which charges £35 plus 0.375% of the amount in excess of £5,000 on each trade.  So generally a bit more expensive than Investdirect.

Are there any other low-cost stock dealers who charge less than Investdirect but also provide a good dealing price?

I wonder whether MSE / Which or similar publications have done any analysis of the quality and price of executions provided by the various low-cost sharedealers.

Mark_d

https://www.ii.co.uk/recommend-ii?ii_referrer=yh5mzkknl2u8-2iopl2wzlltx

I use Interactive Investor.  I find their service first class and is fairly low cost.

poseidon1

Mark_d said:

https://www.ii.co.uk/recommend-ii?ii_referrer=yh5mzkknl2u8-2iopl2wzlltx

I use Interactive Investor.  I find their service first class and is fairly low cost.

I also use II and reccomend their via cheap dealing commissions ( after you use up your free monthly trade ).

However, what they don't seem to be so good at, is access to new gilt issues prior to commencement of trading. In that respect HL have been my go to for new issues and T Bills ( no fees for acquiring new issues at inception).

phlebas192

poseidon1 said:

Mark_d said:

https://www.ii.co.uk/recommend-ii?ii_referrer=yh5mzkknl2u8-2iopl2wzlltx

I use Interactive Investor.  I find their service first class and is fairly low cost.

I also use II and reccomend their via cheap dealing commissions ( after you use up your free monthly trade ).

However, what they don't seem to be so good at, is access to new gilt issues prior to commencement of trading. In that respect HL have been my go to for new issues and T Bills ( no fees for acquiring new issues at inception).

I've used ii for buying a couple of gilts and the prices were decent (within the quoted spread) but bear in mind that they have a monthly charge of £4.99 up to £50k and £11.99 above that so it would quickly get expensive if the OP doesn't already have an account with them or otherwise want one.

I've not purchased gilts via Hargreaves Lansdown and whilst their dealing charges are a lot higher (£11.95 vs ii's £3.99 / free if only trade in the month) it looks like they don't charge a monthly fee for gilts held within their Fund & Share account.

I have purchased several gilts in an AJ Bell SIPP but they don't give direct quotes and the trades have to be passed on to their traders (at least for the gilts I have purchased) but every time the dealt prices have been fine. Dealing fee is £5. They do charge a monthly fee for gilts but it's cheaper than ii (0.25% up to a maximum of £3.50). They offer new gilt issues and some T Bills.

wmb194

Try iWeb, ultimately owned by Lloyds Bank, £5 per trade and no ongoing account fees.

DRS1

It may have been a one off but the only time I tried to buy a gilt with Iweb (and it was a normal gilt not an ILG) they would not quote a price for an online deal.  They wanted you to leave an order to be filled later at who knows what price.  I gave up so I don't know whether it would have been a good price or not.

GeoffTF

I have used iWeb, AJ Bell and HL to trade IL gilts. They all get similar prices as far as I can tell. Interactive Brokers trades IL gilts online direct to a GEMM (i.e. a market maker on the main gilt market), rather than through the London Stock Exchange. They may get better prices than the others, but I have not used them.

intalex

It's a good point, why not allow a target selling price at which a sale is triggered rather than selling it at a blind price in hope that it'll be close to the market value...

Shares have a target price, so why not gilts...

Hoenir

Andreg said:

They provide a good service and generally the price I pay for gilts is somewhat better than the 'offer' price quoted by the LSE (London Stock Exchange). 

Unless you are paying for a premium service from the LSE. Then it's unlikely that you are viewing real time prices.  

OldScientist

I've used iweb both by telephone (before they allowed gilt purchases online) and online. As mentioned above, the online purchase was 'blind' but was fulfilled in about 5-10 minutes and at the market price (since I could see my trade on the LSE). At busy or volatile times, that delay might be longer.

cwep2

I have used iWeb for Gilts for about 3 years. No ongoing platform fees and £5 per trade is pretty cheap.
I am a former bond trader at a bank so getting decent fill was important to me and I know where the market is trading so I can check fairly easily.

The spread shown on platforms or LSE tends to be about 0.2-0.3 for the 1-2yr low coupon Gilts (eg T26, T26A) so something like 97.43 - 97.73 (=mid 97.58). This is wide and you should not be dealing on that kind of spread. For near end Gilts like this the market will be 0.01-0.03 wide so you should be filled within 0.02 of mid (if the quoted mid is correct, which is tends to be) so in the example above I'd expect a fill of 97.59 or 97.60 clean price. Of course you need to add the accrued interest to what you actually pay, this is totally standard.

I used to be able to phone for a price at iWeb, and could therefore say yes or no if it seemed off, but the quote was always good enough for me, and I am someone who would be hard to please and say no if I didn't think the price was good. They since removed that and you submit an at best order online - the fills have been the same as when I would phone online. So overall I am happy enough for short end Gilts (sub 10yr).

For something longer like 15-50yrs it is less liquid and I'd prefer to be able to say no. I bought some TG50 on Friday and the fill was more like 0.10 from mid, which was OK as this is a much less liquid bond, and there hadn't been a trade for at least an hour, but I'd have preferred the option to say yes or no. Ultimately this was a cost of about £20 max on a £10k trade, which if you want a bespoke service you'd probably end up paying a lot more for.