UK Bonds

UK bonds will focus on corporate and government bonds issued in sterling, mainly from UK-based entities. These will tend to come in three main guises: government bonds – those issued by the UK government; investment grade corporate bonds - those issued by high quality blue chip companies; and 'high yield' –- bonds issued by higher risk companies, with a greater chance of defaulting on their payments.
Each type of bond will perform differently in different types of economic environment. In general, bonds where there is not much 'credit risk' , which means not much risk of default such as government bonds, will tend to be more sensitive to movements in interest rates. They may also be more sensitive to rises in inflation – higher inflation will make the fixed income they provide look less attractive. As a result, government bonds and investment grade corporate bonds will tend to do better at a time of weaker economic growth, where there is a risk of lower inflation or deflation. High yield bonds tend to behave more like equities and do better at times of economic growth, when default rates for companies are lower. 
Bonds can be an important source of income for investors, with higher-risk bonds generally paying a higher income than government or blue chip corporate bonds.

Introduction to UK Bonds

UK bonds will focus on corporate and government bonds issued in sterling, mainly from UK-based entities. These will tend to come in three main guises: government bonds – those issued by the UK government; investment grade corporate bonds - those issued by high quality blue chip companies; and 'high yield' –- bonds issued by higher risk companies, with a greater chance of defaulting on their payments.

Each type of bond will perform differently in different types of economic environment. In general, bonds where there is not much 'credit risk' , which means not much risk of default such as government bonds, will tend to be more sensitive to movements in interest rates. They may also be more sensitive to rises in inflation – higher inflation will make the fixed income they provide look less attractive. As a result, government bonds and investment grade corporate bonds will tend to do better at a time of weaker economic growth, where there is a risk of lower inflation or deflation. High yield bonds tend to behave more like equities and do better at times of economic growth, when default rates for companies are lower. 

Bonds can be an important source of income for investors, with higher-risk bonds generally paying a higher income than government or blue chip corporate bonds.

The tax treatment of investments is subject to tax law and HMRC practice which are subject to change.

OEICs and Unit Trusts

Name1 Year (%)3 Years (%)5 Years (%)Fund Size (M)Yield (%)
AXA Framlington Managed Income Z Gross Acc14.4024.2566.78313.735.05Buy
AXA Framlington Managed Income Z Acc13.0920.0356.83313.734.51Buy
AXA Sterling Strategic Bond Z Acc7.4619.9025.00211.451.80Buy
AXA Sterling Strategic Bond Z Gr Acc7.9521.6728.25211.451.80Buy
AXA Sterling Credit Short Duration Bond Z Gr Acc3.466.7916.36549.561.50Buy
AXA Sterling Credit Short Duration Bond Z Acc3.195.7214.10549.561.50Buy
Aberdeen Sterling Government Bond I Acc5.5517.8415.46157.861.10Buy
Aberdeen Sterling Long Dated Corporate Bond K Acc11.5427.9048.5524.802.80Buy
Aberdeen Sterling Long Dated Government Bond I Acc12.0043.6538.1044.091.20Buy
Aberdeen Sterling Long Dated Government Bond K Acc10.7339.6634.5444.091.30Buy
Aberdeen Sterling Short Term Government Bond I Acc0.752.92-100.290.30Buy
Alliance Trust Monthly Income Bond P Acc8.1814.3341.25228.985.96Buy
Alliance Trust Monthly Income Bond P Gr Acc9.4818.3248.54228.985.95Buy
Alliance Trust Monthly Income Bond B Acc7.9613.5240.12228.985.95Buy
Alliance Trust Monthly Income Bond B Gr Acc9.3017.5848.51228.985.95Buy
Artemis Strategic Bond I Monthly Acc9.6014.6141.88977.294.09Buy
Artemis Strategic Bond I Quarterly Acc9.6514.7443.23977.294.08Buy
Baillie Gifford Active Gilt Plus B Acc5.0319.4717.2392.690.90Buy
Baillie Gifford Active Long Gilt Plus B Acc10.8539.7533.3146.711.70Buy
BlackRock Corporate Bond Tracker D Acc8.4320.0737.581,705.452.80Buy

OEICs and Unit Trusts

Name1 Year (%)3 Years (%)5 Years (%)Fund Size (M)Yield (%)
AXA Framlington Managed Income Z Gross Inc14.3424.2366.80313.735.83Buy
AXA Framlington Managed Income Z Inc13.0820.1457.18313.734.65Buy
AXA Sterling Credit Short Duration Bond Z Inc3.115.7813.84549.561.50Buy
AXA Sterling Credit Short Duration Bond Z Gr Inc3.336.7216.35549.561.50Buy
Alliance Trust Monthly Income Bond P Inc8.1114.3141.12228.985.98Buy
Alliance Trust Monthly Income Bond P Gr Inc9.4018.2048.75228.985.98Buy
Alliance Trust Monthly Income Bond B Inc7.9413.5440.22228.985.97Buy
Alliance Trust Monthly Income Bond B Gr Inc9.2417.5248.42228.985.97Buy
Allianz Gilt Yield I Inc6.6319.0517.331,166.951.28Buy
Artemis High Income I Monthly Inc9.8814.9858.881,148.615.68Buy
Artemis High Income I Inc10.0215.3461.361,148.615.66Buy
Artemis Strategic Bond I Quarterly Inc9.6614.7042.04977.294.12Buy
Artemis Strategic Bond I Monthly Inc9.6414.7643.32977.294.10Buy
Baillie Gifford Active Gilt Plus B Inc5.0419.4417.1792.690.90Buy
Baillie Gifford Active Index-Linked Gilt Plus B Inc21.0545.1044.39109.560.60Buy
Baillie Gifford Active Long Gilt Plus B Inc10.8439.7033.2946.711.70Buy
Baillie Gifford Investment Grade Bond B Inc8.6820.1839.33225.813.20Buy
BlackRock Corporate Bond Tracker D Inc8.0619.6037.071,705.452.81Buy
BlackRock UK Gilts All Stocks Tracker D Inc6.1121.5419.254,336.301.63Buy
CF Canlife Corporate Bond C Inc GBP8.2117.5732.56293.013.81Buy

ETFs

Name6 Months (%)1 Year (%)3 Years (%)5 Years (%)CurrencySector
Pimco Sterling Short Maturity Source UCITS ETF0.410.972.164.25GBPFixed Int - GBP Short/ Medium MaturityBuy
Vanguard UK Gilt UCITS ETF-3.576.0123.65-GBPFixed Int - GBP GovernmentBuy
iShares Core UK Gilts UCITS ETF GBP-3.155.6522.0120.92GBPFixed Int - GBP Investment GradeBuy
iShares UK Gilts 0-5yr UCITS ETF 0 5 GBP-0.221.375.435.82GBPFixed Int - GBP GovernmentBuy
iShares £ Index-Linked Gilts UCITS ETF GBP6.6420.6144.1344.51GBPFixed Int - GBP Investment GradeBuy

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