A gilt-edged security (gilt) is a government bond - a security or stock issued by the government paying a fixed rate of interest and redeemable on a set date for a set amount, usually £1,000.
Gilts are considered one of the safest long-term investments, as the government is unlikely to default on its payments. As with most fixed interest-securities or bonds, the price of a gilt is sensitive to interest rates and inflation. As rates rise the price of gilts will fall to bring their yield in line with the market, and as interest rates fall the price of gilts will rise.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
-
Buying infrastructure funds - 'cheap is not always cheerful'Opinion Well-balanced infrastructure funds offer better prospects than high-yielding renewables funds, says Max King
-
The new products and growth sectors driving America’s long-term winnersOpinion Felix Wintle, manager of the VT Tyndall North American Fund, highlights three favourite US stocks where he'd put his money
