Fixed Interest

Fixed Interest Investments

Fixed interest investments are never going to provide the greatest performance, but their appeal lies in the fact that they can provide a comparatively safe haven during troubled times.

Collectives can also invest in Fixed Interest securities such as UK Government Stock, also known as Gilt Edged Stock or "Gilts" for short. Corporate Bonds are also regarded as Fixed Interest Securities and this type of product usually has little or no equity content whatsoever.

A Corporate Bond invests in high yielding, Sterling denominated, Corporate and Government Bonds and this is essentially a loan which the investor, or bondholder, makes to the Company/Government for a fixed period. In return, the borrower regularly pays a fixed amount of interest over the life of the Bond. However, this income paid to the bondholder, i.e. you, is not fixed and may fluctuate.

A Corporate Bond (or fixed interest bond) usually carries less risk than equities or Capital Investment Bonds (which invest in equities), but there is still a degree of risk since Bonds can, and some do, fall in value. Traditionally, all types of Fixed Interest investment have been regarded as a safe option but it is also important to remember that not only do they fluctuate in price but there is a risk to you, the investor, if the Issuer defaults and cannot pay both the interest (coupon) or repay the principal when the Securities mature.

Levels and bases of and reliefs from taxation are subject to change and their value depends on the individual circumstances of the investor.

The value of your investment can go down as well as up and you may not get back the full amount invested.