What We DoInvestment Bonds

Navigate the Landscape of Bond
Investment and Capital Preservation

Building and Protecting Your Wealth Through Strategic Bond Portfolios

Learn more about investment bonds

What are
Bond
Investments?

Understanding the Role of Bonds in a Balanced Investment Strategy

At their core, bonds are debt instruments — essentially formal IOUs — issued by governments, companies, or other institutions seeking to raise capital for specific projects or ongoing operations.

When an issuer, such as a government or corporation, needs to borrow funds, it offers bonds to investors. Each bond specifies the repayment date and the fixed or variable interest to be paid — known as the “coupon.” This regular income stream makes bonds appealing to those seeking predictable returns and capital preservation within a diversified portfolio.

Bond-Focused
Growth

The longer your capital remains invested in bonds, the greater the potential benefits — allowing you to pass on value smoothly to future beneficiaries.
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Are Bonds Right for You?

Bonds tend to offer greater stability than equities, which is why they often form part of a well-diversified portfolio. A useful rule of thumb: when interest rates fall, bond prices typically rise. If you hold a bond to maturity, you will generally receive back your original investment along with the agreed interest payments.

For investors seeking steady income and capital preservation, bonds can be an appealing option. Many advisers suggest that as individuals approach retirement or wish to reduce portfolio volatility, increasing bond exposure can help achieve a more defensive investment position.

How You Earn
from Bonds

You can earn from bonds through the coupon rate, which is the fixed interest paid by the issuer.

When you purchase a bond, you agree to lend money for a set period in exchange for regular coupon payments typically twice a year, until the bond matures.

These interest payments provide a consistent and predictable source of income, making bonds appealing to investors who value stability. The coupon rate is determined when the bond is issued and remains unchanged, meaning you’ll continue to receive the same payments regardless of fluctuations in market conditions or interest rates.

01

UK Government Bonds (Gilts)

The UK government issues bonds — known as gilts — to help manage national finances. Backed by the full faith and credit of His Majesty’s Treasury, gilts are widely regarded as low-risk investments. They range from short-dated Treasury bills to long-dated conventional and index-linked gilts, providing fixed or inflation-adjusted returns. Interest on gilts is subject to income tax, though they remain a cornerstone for investors seeking stability and predictable income.

02

Local Authority Bonds

Local councils and other public bodies may issue bonds to fund infrastructure and community projects. These bonds allow investors to support local development while earning a fixed rate of return. Although not as common as gilts, local authority bonds can offer slightly higher yields to reflect additional credit risk. They are typically available through brokerage or investment platforms.

03

International and Emerging Market Bonds

Investing internationally provides access to a wide range of sovereign and corporate bonds outside the UK. These instruments vary in yield, maturity, and credit quality, and may be influenced by currency movements, political change, or differing regulatory environments. Emerging market bonds, in particular, can offer attractive returns.

04

Corporate Bonds

Corporate bonds are issued by companies seeking to raise capital, offering investors regular interest payments in exchange for their investment. The level of risk depends on the issuer’s financial strength and broader market conditions. Corporate bonds can offer more attractive yields. They are typically categorised as investment-grade or high-yield (“sub-investment grade”) depending on credit rating. The London Stock Exchange provides detailed trading data for many listed bonds.

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