T35V Gilt

SVaz

If I buy say £10k of this in my Sipp and hold until maturity,  what will I have in October 2035?

Is it as simple as £4750 in coupons + the £10k back,  ignoring any interest on the saved coupons ?  

wmb194

SVaz said:

If I buy say £10k of this in my Sipp and hold until maturity,  what will I have in October 2035?

Is it as simple as £4750 in coupons + the £10k back,  ignoring any interest on the saved coupons ?  

Not quite, looks like you’ll have to buy them slightly above par and pay 2.4p per unit in accrued interest at purchase.

poseidon1

wmb194 said:

SVaz said:

If I buy say £10k of this in my Sipp and hold until maturity,  what will I have in October 2035?

Is it as simple as £4750 in coupons + the £10k back,  ignoring any interest on the saved coupons ?  

Not quite, looks like you’ll have to buy them slightly above par and pay 2.4p per unit in accrued interest at purchase.

Indeed.

HL currently pricing anything between 100.81 to 100.85 today plus commission plus accrued interest. 

Per LSE trades today ( below), price has been ticking up over the past few days

https://share.google/8IGHBVst7X2VbwH0M

I have a couple of holdings in Sipp and ISA ( acquired below par at intial offer), but purely as an alternative to MMFs where cash returns are trending downwards.

I don't expect to hold either beyond the 1st coupon payment next year, and may even exit earlier if an enticing corporate bond appears on my radar. 

poseidon1

Incidentally @SVaz, have you made your first gilt acquisition yet?

 I see you have been contemplating for some months now, but best way to experience how this works is to test the water with your first purchase.

Personally, I buy at 1st issue, since the syndicated offer system has been delivering below par price access, thereby avoiding commissions, accrued income and potentially higher prices you now face as a post issue market purchaser.

SVaz

Not yet, no.
I’m just looking for a bit of income from my ‘spare’ Sipp for a few years, maybe £3k a year to gift to my Grandson.  

So any time from 2033 on really and rather than starting a Gilt ladder I thought that £15k will cover 5 years.
According the streamlit gilt calc site,  spending £9700 on a 2035 Gilt will give that amount and it seems a better option than using a short term money mkt fund for 8 years or more.  

I need to alter my investments in that Sipp anyway,  it’s nearly all in HSBC GS dynamic and I’ll be taking the TFLS in 2 or 3 years time. 

SVaz

Could someone with access to a Gilt calculator please help me out?

If I buy
30 x TS34
30 x TG35
30 x T4Q
30 xTG37

what will the actual cost be (excluding trading fees with HL)  ?
I get it to around £10k but not sure of my sums.
I know the price may change as it will be Friday or Monday due to selling some of my Fidelity index world. 

What total return will it give me ?

I’m hoping for at least £15k. 

Obviously the interest on putting all the coupons into a STMM fund will vary but a ballpark figure would be nice, using 2.5% p.a. 

InvesterJones

I make the cost £10,181

Returns £15,303.75 before tax and not including interest on the coupon payouts.

SVaz

Thank you so much.  

poseidon1

A little surprising that T35V continues to trend upwards in price, closing at 101.66 to buy with an implied yield to redemption now at 4.695%.

Johnjdc

wmb194 said:

SVaz said:

If I buy say £10k of this in my Sipp and hold until maturity,  what will I have in October 2035?

Is it as simple as £4750 in coupons + the £10k back,  ignoring any interest on the saved coupons ?  

Not quite, looks like you’ll have to buy them slightly above par and pay 2.4p per unit in accrued interest at purchase.

Can I ask which site this is (since YieldGimp are now charging)?

wmb194

Johnjdc said:

wmb194 said:

SVaz said:

If I buy say £10k of this in my Sipp and hold until maturity,  what will I have in October 2035?

Is it as simple as £4750 in coupons + the £10k back,  ignoring any interest on the saved coupons ?  

Not quite, looks like you’ll have to buy them slightly above par and pay 2.4p per unit in accrued interest at purchase.

Can I ask which site this is (since YieldGimp are now charging)?

This one:

https://giltsyield.com/bond/