Bonds: UK Gilts

Published by Philip Scott on 30 July 2015.
Last updated on 30 July 2015

Bonds: UK Gitls

According to trade body, the Investment Association, collectively we now have £899 billion invested in funds - pooled investment schemes sometimes referred to as unit trusts or OEICs.

But investing can be a tricky business, given the plethora of products on offer. In addition, investing is also a long-term business and there will be ups and downs, so patience is key. While there is no shortage of funds to choose from, finding fund managers who can deliver consistently is another matter.

Rob Gleeson, head of FE Research, a fund analyst, explains: "Generally, the most consistent managers are the ones with a strong core strategy. While they will have ups and downs across the business cycle, over multiple cycles they offer relatively stable returns."

To give you an idea of where you might want to squirrel away some cash, we've picked out 50 fund choices, as recommended by some of the UK's top fund-pickers. Our panel includes: Darius McDermott, managing director of brokers Chelsea Financial Services; Mark Dampier, head of research at Hargreaves Lansdown; Gavin Haynes, managing director of Whitechurch Securities; and Adrian Lowcock, head of investing at Axa Wealth.


Bonds, sometimes referred to as fixed-income investments, are 'IOUs' issued by governments or firms looking to raise cash. Investors lend their cash for a set period of time and, in return, the issuer pays interest. When the bond matures, the capital should be returned in full. Experts recommend them to create a balanced and diversified portfolio.


Widely seen as the safest asset class after cash, these funds invest in UK government-issued bonds, also known as gilts.The more gentle yields on offer reflect their lower-risk characteristics.


This fund invests in gilts, which keep track of the rate of inflation. Haynes says: "For low-cost exposure to index-linked gilts, this index tracker is a good choice."

29. VANGUARD UK GOVERNMENT BOND INDEX - Five-year return: 32%

Noted by McDermott, this tracker aims to echo the returns consistent with the performance of the Barclays Capital Global Aggregate UK Government Bond Index.

30. M&G GILT AND FIXED INTEREST INCOME - Five-year return: 23%

Lowcock describes the fund, which is run by Michael Riddell, as "a conservative fund with around 80% invested in UK government bonds".