GILTS

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:25AM in AAT student discussion
Can anyone please give me a quick explanation of GILTS. Advantages / disadvantages, security, and how risky they are / what sort of return on investment to expect

thanks

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:GILTS

    As per our handout:
    Definitions of gilts vary, but most people use the term to mean marketable British Government Securities. These stocks, although small in number dominate the fixed interest market.
    Convertible gilts
    These stocks are redeemable on the date shown or, at the holder's option, convertible into a new longer dated stock. Convertible stocks have gross redemption yields lower than those if similar unconvertible stocks with the same redemption date.
    Gilt edged stocks may be purchased or sols
    through a stockbroker
    through a registered agent (normally a bank, solicitor or accountant) who will, in turn act through a stockbroker; or
    through larger post offices as agents for the Bonds and Stock Office.
    When gilts are purchased or sold through a stockbroker or registered agent the transactions will be done on the Stock Exchange. The transaction will be for 'immediate settlement' which actually means settlement the next day.
    The cost of dealing in gilts through a broker will be the stockbroker's commission, which is now exempt fro V.A.T. Commission on gilts are considerably lower than on equities.
    If gilts are purchased through an agent the commission will be somewhat higher as the total commission has to be shared between the stockbroker and the agent.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:GILTS

    thank you
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:GILTS

    In other words, they are a BOND issued by the government.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:GILTS

    indeed

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