TR35

Ciprico

TR35

1 1/8% I-linked Gilt 2035

1.125%

22-Sep-2035

9 years 282 days

£95.96

£100.112

1.573%

Could someone clarify with the above IL gilt, it would deliver CPI + 1.125% (compounded from inception, currently 1.573%), each year until 2035

...and I don't need to concern myself with clean or dirty prices if I buy say £10K worth.

...and I understand the price will fluctuate between now and 2035

My currently long term SIPP "safe" money is in CSH2 - giving 3.97%, this gilt gives CPI 3.6% plus coupon 1.573% = about 5%, if my understanding is correct....

SnowMan

The overall real return was 1.59%pa (the  real return to maturity assumes compounding) based on Friday's closing price. It's about 1.55%pa real yield based on today's closing price. And obviously it will depend on the price when you actually buy it. That real return is above RPI inflation to 2030 and then CPIH inflation from 2030. 

The real return is more than 1.125%pa because this index linked gilt is priced below par (i.e. the clean price was 95.89 at Friday's close which is less than 100). If the clean price was 100 then the real return would be 1.125% but bar a huge market movement it will be less than 100. This assumes it is held in a tax free wrapper such as an ISA or SIPP and so your real return is the same as the gross real return. 

The diagram below shows a breakdown of the real yield based on Friday's close. The real return (the top bar on the left) comes from (as shown on the right) the coupons and the maturity amount being more than the purchase price plus indexation. 

Ciprico

Fantastic answer....

Storcko14

Great visual @SnowMan.  It's front and centre on my spare (post-retirement) monitor in the office.

TSCati

I'm looking at building a gilt ladder and TR35 does not currently appear on either Interactive Investor or Hargreaves Lansdown platforms.

Is this because there is currently no availability?

If so, does anyone know a way of getting notification when they are available to buy again?

gravel_2

TSCati said:

I'm looking at building a gilt ladder and TR35 does not currently appear on either Interactive Investor or Hargreaves Lansdown platforms.

Is this because there is currently no availability?

If so, does anyone know a way of getting notification when they are available to buy again?

I don't have an account but I see it. It's not called TR35 on HL. Try the ISIN GB00BT7HZZ68 (https://www.hl.co.uk/shares/shares-search-results/t/treasury-1.125-22092035-index-linked-gil).

ColdIron

This one?

https://www.hl.co.uk/shares/shares-search-results/t/treasury-1.125-22092035-index-linked-gil

I think the closing parenthesis got included in the link

TSCati

That's very helpful - thank you @gravel_2 and @ColdIron.

I can find it if I search for "2035 index" on HL but still nothing comes up on ii.

"GB00BT7HZZ68" doesn't seem to show up on either?

I probably need to give ii a call and see what they say, as I'd prefer to build my gilt ladder with them.

tigerspill

TSCati said:

That's very helpful - thank you @gravel_2 and @ColdIron.

I can find it if I search for "2035 index" on HL but still nothing comes up on ii.

"GB00BT7HZZ68" doesn't seem to show up on either?

I probably need to give ii a call and see what they say, as I'd prefer to build my gilt ladder with them.

That is the correct one - "Treasury 1.125% 22/09/2035 Index-Linked Gilt".  HL don't seem to use the ISIN numbers.

https://www.hl.co.uk/shares/shares-search-results/t/treasury-1.125-22092035-index-linked-gil/company-information

Alexland

TSCati said:

I probably need to give ii a call and see what they say, as I'd prefer to build my gilt ladder with them.

If you go with AJ Bell (where I decided to hold my gilts for cheaper capped fees on a SIPP than HL's cap or II's fixed price on a large account) then they have a handy list showing ISIN numbers which you can sort by maturity date and if you are logged in then a shortcut to place an online order with them. There is no online quoting function on gilts but if you are worried about the spread on a large order then you can phone them and ask to place a fill-or-kill order where you set the highest price you are willing to pay and they still only charged me £5 for the trade.

https://www.ajbell.co.uk/investment/bonds/gilts/prices

TSCati

Sounds good. Thank you @Alexland