Bonds hub
Please remember, investment value can go up or down and you could get back less than you invest. The value of international investments may be affected by currency fluctuations which might reduce their value in sterling.
How do bonds and gilts work?
Bonds and gilts are typically low risk fixed income investments which can take pride of place in any portfolio. Corporate bonds are issued by corporations and gilts are bonds issued specifically by the British government to borrow money.
There are different types of gilts but most will typically pay a fixed coupon biannually and mature on a set date in the future.
Find out more: What are bonds?
Why choose interactive investor to buy bonds and gilts?
- We offer one of the widest choice of investments in the market including bonds and gilts.
- Our flat fee plans start from £4.99 per month - Most other investment platforms charge a percentage fee that grows with your investments.
- The £4.99 monthly fee includes our Stocks & Shares ISA and Trading Account.
- Free Regular Investing - available on all of our plans.
Bonds and gilts available at ii
Investments should not be taken as personal recommendations to buy or sell a particular stock or fund, and are not intended to provide advice.
How to buy bonds
You can trade a number of bonds and gilts via your online ii account. For any that aren't available online, you can deal over the phone by calling us on 0345 607 6001.
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Fixed Income – review Q1 2025
The Bloomberg Global Aggregate Index (sterling hedged) rose 1.22% this quarter as US Treasury yields fell as investors sought to de-risk due to policy uncertainty leading to recessionary fears amid indications of weaker economic activity. US Treasuries outperformed US corporates and investment grade outperformed high yield. US 2-year Treasury yields fell from 4.25% to 3.91%, while 10-year Treasury yields fell from 4.58% to 4.25% over the quarter.
In the UK, gilts closed the quarter 0.55% up despite a number of headwinds in the form of a deteriorating fiscal outlook, which culminated in budget cuts and fears of stagflation. UK 2-year treasury yields fell from 4.38% to 4.21%, while 10-year yields rose slightly from 4.57% to 4.69%. Sterling corporates underperformed relative to gilts falling 0.68% as spreads widened with inflation-linked gilts also seeing a fall, with a decline of 1.42%.
In Europe, government bonds underperformed corporates as yields rose as Germany announced plans to create a €500 billion infrastructure fund and that it will be loosening borrowing rules to boost defence spending. As a result, German bund 10-year yields increased from 2.36% to 2.73%, while 2-year yields saw marginal decrease from 2.07% to 2.03%.
Since the announcement of Trump’s Liberation Day tariffs, which applied globally, yields have fallen across the globe as investors have fled to safe havens over recessionary fears and increasing economic uncertainty, especially over any potential retaliatory actions. All this will no doubt weigh on central bank policy makers over rate cuts as they tread a fine line between controlling inflation and any potential economic fall-out from widespread tariffs.
Q1 | 1 year | 3 years | 5 years | |
Global Aggregate | -0.41 | 0.85 | -0.97 | -2.17 |
Global Government | -0.46 | -0.31 | -2.56 | -3.79 |
UK Gilts | 0.55 | -1.19 | -6.14 | -5.81 |
Global Corporate | -0.70 | 2.95 | 2.14 | 0.89 |
Sterling Corporate | 0.73 | 2.44 | -0.82 | -0.19 |
EURO Corporate | 1.30 | 2.04 | 0.55 | -0.09 |
Global Inflation Linked | 0.35 | -0.79 | -4.69 | -1.50 |
UK Inflation Linked | -1.47 | -8.05 | -14.28 | -7.55 |
Global High Yield | -1.18 | 6.57 | 6.19 | 6.23 |
Source: Morningstar as of 31 March 2025. Total Returns in GBP. Global Aggregate: Bloomberg Global Aggregate, Global Government: Bloomberg Global Treasury, UK Gilts: FTSE Act UK Conventional Gilts All Stocks. Global Corporate: Bloomberg Global Corporate, Sterling Corporate: ICE BofA Sterling Non-Gilt, Euro Corporate: Markit iBoxx EUR, Global High Yield: Bloomberg Global High Yield, Global Inflation Linked: Bloomberg Global Inflation Linked, UK Inflation Linked: Bloomberg Global Inflation Linked UK. Past performance is not a guide to future performance.
Learn more about investing in bonds with ii
What are bonds?
The basics of bonds. Find out about the types of bonds, bond yields, tax on bonds and bond prices.
What are gilts?
A beginners guide to gilts. Learn about the types of gilts, gilt yields and gilt tax rules.
Corporate bonds
Discover the types of corporate bonds, corporate bond tax rules, how to invest in corporate bonds and why.
