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Fixed-Interest Stocks

Fixed-interest stocks are investments that can provide a regular income stream
for your portfolio at known points in time.

WHAT DOES ‘FIXED-INTEREST’ MEAN?

Fixed-interest stocks pay a fixed rate of interest or dividend on an annual or semi-annual basis. The interest is determined by the coupon (the gross interest rate of the nominal value, expressed as a percentage e.g. the holder of a 5% Treasury 2028 gilt is entitled to £5 interest annually for every £100 nominal held).

WHAT ARE THE DIFFERENT TYPES OF FIXEd-INTEREST INVESTMENTS?

  • Government Stocks (Gilts)
  • Corporate Bonds
  • Eurobonds
  • Preference Shares
  • Permanent Interest Bearing Shares (PIBS)

WHAT FIXED-INTEREST INVESTMENTS CAN I HOLD WITHIN MY ISA?

All of the above types are eligible investments for a stocks and shares ISA. However, it is worth noting that the level of associated risk can vary across these. Government gilts are widely considered 'low-risk' investments whereas unrated corporate bonds would be viewed as higher risk.
Please remember that the payment of income and the return of capital from any fixed-interest stock could be in jeopardy in the event that the parent company has problems meeting its financial obligations. Most stocks are tradable on an exchange (like shares) so your investments can fall in value.
 

DO YOU NEED FURTHER INFORMATION?

You can download our Fixed-Interest Stocks Fact Sheet, or alternatively you can contact your local Redmayne Bentley office.
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