Buying ILGs on iWeb

michaels

So I purchased a linkers ladder to cover DW for the 7 years until SPA paying out at the personal allowance level (in real terms, obviously this will be exceeded with the linking) with AJ Bell

All looks good except for the T30I which is showing a 1.42% loss from when I bought it at about 2pm and close whereas I can see a slight rise in the gilt looking online.  Does this gilt have a massive spread for some reason?

GenX0212

michaels said:

So I purchased a linkers ladder to cover DW for the 7 years until SPA paying out at the personal allowance level (in real terms, obviously this will be exceeded with the linking) with AJ Bell

All looks good except for the T30I which is showing a 1.42% loss from when I bought it at about 2pm and close whereas I can see a slight rise in the gilt looking online.  Does this gilt have a massive spread for some reason?

Does it actually make any difference if you are going to hold to maturity?

Secret2ndAccount

If you go to https://www.londonstockexchange.com/stock/T30I/united-kingdom/trade-recap
you can see all trades in T30I today. All 340.something, At 4 1/8% there's alreay a good chunk of coupon accrued. Is the discrepancy the difference between the inflation-adjusted clean price and the actual dirty price (iWeb not accounting for the accrued coupon)?  Maybe that doesn't show up in the others if the coupon is small. If that's the case, you should be fine once the next coupon is paid, though you might still show that loss in perpetuity in your account.

SnowMan

T30I is an 8 month lag old style index linked gilt.

As such there is only a) an indexation (inflation) adjusted excluding accrued interest price and b) an indexation (inflation) adjusted including accrued interest price.

I agree with Secret2ndAccount that the price at which it is being valued is likely to be the inflation adjusted excluding accrued interest price, and that probably explains the 1.42% reduction in value, as the purchase will have been at the inflation adjusted including accrued interest price.

The accrued interest in the tradeweb closing price yesterday was 4.91395 and the inflation adjusted excluding accrued interest price was 340.862. 4.91395 is about 1.44% of 340.862. So the end of day valuation probably indicates no major movement since purchase to the end of the day, or a slight gain that mitigates the spread. It's just that the accrued interest at purchase that you will receive on 22nd January 2026 isn't allowed for in the end of day valuation.

michaels

Thanks both, have managed to find the details of the trade and indeed I did pay about 1.45% on top of the price to purchase the accrued interest.