UK Government Bonds

I’m looking at adding some UK Government Bonds to my portfolio but I have always focused on equities so I’m a bit of a novice when it comes to bonds and fixed income assets.

I read something that said you should try match bond maturity with your investment timescales. What long term maturity UK government bonds are available? Are there any alternatives or downsides to this methodology?

Might be worth checking out the Bond ETFs under the Discover tab for UK bonds available with Freetrade.

Bonds provide some balance in times of volatility (I have some in my portfolio). For example see how Vanguard UK Gilts ETF has reacted to the markets dropping in March, compared to the global equity Vanguard All World ETF:

Vanguard UK Gilts ETF has exposure to bonds which mature from 2024 all the way through to 2068.

DYOR.

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Do you know if say, a Lifestrategy 80 has some exposure to property in a similar robustness as a reit? Or does the real estate % relate to property stocks only?

The awkward compromise is freetrade do not allow reits in isa’s. Yet I want to pay into 2 reits longterm. Super awkward.

Freetrade ISA allows you buy Empiric Student Properties which is a REIT, so I don’t know how that works.

But if you want to buy REITs, why not a REIT ETF? More diversified and easier than doing fundamental analysis in REITs

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I’m not sure that the Lifestrategy Funds have any significant exposure to property, unless indirectly via REITs or property shares included as part of the underlying trackers they cover.

Agree, it’s a shame that Freetrade doesn’t yet allow REITs in ISAs, hence the ones I hold are in ISAs with other providers (purchased in the past).

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The headache is working out where to purchase these things on all different platforms. Having a main fund with one provider, a stock & trust pick with another, reits with another, bonds with another… gets hectic.

Could I ask a general question to anybody that reads this; Does it make sense hypothetically to pay into a REIT ETF in a general investment account and in the future transfer into the isa which allows for such an etf? Do any of you use a general investment account for certain allocations in hope to move into an isa later down the line?

Thanks.

You can hold the REIT ETFs in an ISA no problem. I hold both £IWDP and £IUKP both in my ISA.

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Scary. The basic message is there will be a market for a product that allows people to store money at a loss until what evers next passes.

What affect will these ‘negative bonds’ have on the various Bond ETFs?

ETFs which replicate the market (i.e. UK Gilts on Freetrade) will end up having to buy them in order to continue to track the market. This will reduce the yield on the ETF over time as more recent bonds come to dominate.

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That’s what I thought. I currently hold 10% of my portfolio in bonds to help smooth some of the volatility of the stock markets. Time to rethink that strategy.

Not necessarily. The bond ETFs mostly already yielded less than inflation so you were already losing money in real terms. However, it is likely that prices will continue to rise and demand for safe places to store cash will contribute to grow. So your bonds will benefit from price increases.

If thats your reason for holding government debt then you have no reason to change. You are not going to lose money simply because 1 set of bonds has been sold at a negative rate. This simply indicates that government debt is more valuable than it ever has been. You will not ‘lose money’ because of this.

If it persists over a 5 year timeframe then I would suggest you rethink your strategy

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