Gilts

Description
Gilts, or gilt edged securities, are simply IOUs issued by the government, usually with fixed returns and set maturity dates. The capital and interest payment obligations of gilts are backed by the full faith and credit of the government.

Objective
To provide investors with steady income over short, intermediate and long periods of time and repay the capital.

Suitability
Gilts are well-suited for security conscious, income oriented investors. Some gilts provide a limited income but guarantee to grow with inflation. These can be ideal if you want capital growth with limited risk.

Features

• Security: Gilts are a direct obligation of the British Government, which has never failed to repay a gilt.
• Income: Interest is paid regularly and offers a wide choice of returns and timescales.
• Liquidity: Gilts may be sold on any business day at their current market value, which may be more, less or equal to the initial amount invested.
• Fixed rate of return: Gilts are priced in terms of how much you must pay to buy £100 nominal of the investments. Once you buy a gilt, you have a fixed rate of return until the gilt matures. The price may fluctuate on a daily basis, although this is of no concern unless you sell your investment before it matures. In that case you may get back more, less or equal to the amount you originally invested. When the investment matures you get back the nominal amount.

Contact your Edward Jones financial adviser for more information about using gilts to balance your portfolio.