Welcome to the bond markets! A casual browser of the UK’s financial media could be forgiven for believing that the only options open for private investors are equities, cash and pooled investments such as managed funds. This is far from the case, and the sterling fixed income markets offer investors a wide choice of assets ranging from the security of government-backed gilts through to more speculative, and higher yielding corporate bonds.
For the last few decades, these markets have largely been the preserve of institutional investors, with the players typically bank treasuries, insurance companies and fund managers dealing in multi-million pound units. Price transparency and liquidity for the individual investor has at times been poor. The situation, however, is changing. ISA and SIPPS are increasing the demand from private investors for income-producing assets. In addition to this, online execution platforms such as the LSE’s new ORB platform are enabling brokers to obtain price discovery and execute small-size tickets (i.e sub £1 million) at commercial prices. We aim to help increase the understanding and usage of this important asset class through a combination of educational articles, analysis reports, model portfolios and other tools. Over the next few years, we expect the majority of private investors to have at least a small proportion of their portfolio held in fixed income assets. See “Why every portfolio should contain bonds” for more on this subject.
Please take the time to read through these guides at your leisure. You may also wish to become a regular reader of our “Bond of the week“, which aims to lay out the features of a number of different bonds over the course of a year, as well as highlighting potential investment opportunities.
- Types of Bonds: Gilts, Eurobonds etc. What’s in a name?
- Why every Portfolio should contain Bonds: The argument for bonds.
- What are the risks ? How does holding bonds compare to cash, equity or other assets?
- Credit Ratings explained: Credit Ratings are a tool used by professional investors to help assess risk
- Calculating the yield, or what’s my return?
- Glossary :A few useful phrases to bandy around with your broker
Investors Intelligence has further educational articles on the fixed income markets, explaining some of the more exotic instruments trading in the bond markets and features on the main players in this multi-billion pounds arena.
Please note, the content on this section of the website is provided for educational purposes. Examples shown of prices, yields and credit ratings may have changed since the time of publication.
Learn About Bonds – Bond FAQ – Bond Glossary – Building a portfolio – Buying bonds – Calculating the yield – Index Linked Gilts – Credit Rating explained – What are the risks? – Bonds in your Portfolio – Types of Bonds
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