Canaccord Genuity Wealth Management UK and Crown Dependencies (CGWM) has launched its gilt portfolio service.
The service has been developed in response to the resurgence of fixed income investing in the last year.
It is for investors who are interested in receiving a tax-efficient, low risk return that is higher than a return on cash savings, who have a minimum of £100,000 ($127,000, €116,000) to invest and are in a position to leave their money invested for at least two years.
According to the wealth manager, investing in gilts is “particularly attractive at the moment”, as not only do they give a better rate of return than a bank account, compared to a fixed term deposit, the return is similar and there is no restriction on what can be invested.
Unlike bank deposits, gilts are also highly liquid – selling them in the market on a Monday means cleared funds by Tuesday. For individual higher rate taxpayers, investing in short-dated gilts is even more attractive because any capital appreciation is free from capital gains tax (CGT).
Tom Becket, from Canaccord Genuity’s chief investment office, said: “The time is now for investing in short-dated gilts. From years in the doldrums where returns from bonds were close to zero, as interest rates have ticked up, so have returns on gilts.
“It’s a worrying time for investors – between inflation and volatility in equity markets, many of those who are cautious have kept their money in the bank.
“But when weighing up the pros and cons of short-dated gilts, cash and fixed term deposits – plus the tax advantages of investing in certain gilts that are trading substantially below par – it’s clear that investing in gilts is much more advantageous than it has been for years.”
