Why investors in the UK should keep faith in equities

Likely to benefit over next decade

In recent times, we have seen many UK investors turning to gilts, or government bonds, as safe haven assets while the sentiment in equities remains low.

The 6% 12/07/2028 gilt is of unusual interest to UK investors but not because it is trading particularly out of line with other gilts, offering as it does a redemption yield of just over 0.5%. Instead, the point of interest comes from its high nominal coupon. In fact, there is only one other gilt now remaining with a higher nominal coupon, the 8% 6/7/2021. Index-linked gilts could fall up to 30% if RPI is scrapped Given 6% of 2028's redemption yield is so low compared to its coupon and that it has more than eight years left to run, it is no surprise to learn that the bond is tradin...