Gilts or Gilt-Edged securities to give them their full title, are issued by the UK government to fund its expenditure – effectively you are lending them your money. Because no government has ever defaulted on repaying these loans on time, they are considered to be sound investment.

In exchange for lending them your money you get interest – either at a fixed rate or linked to inflation depending on the particular gilt you buy. And in some cases you can be sure of capital growth too, for some gilts can be bought for less than their guaranteed final value.

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Bonds are issued by local authorities and companies as a way of raising finance. Like Gilts, they are repaid at a future date and carry a rate of interest that is either fixed or index-linked to inflation.

Bonds are often used for income generation and are a core portfolio constituent. Because of the fixed interest nature of these products, their price reflects the outlook for interest rates and inflation. As well as buying individual Bonds, you can invest in them through actively-managed Funds or passive Bond ETFs, which aim to mirror the performance of bond indices.

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What's available

• Sterling Bonds
• Convertible Bonds