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VGOV vs Conventional/Index Linked Gilts
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Busy doing nothing
Posted: 11 January 2025 11:03:01(UTC)
#21

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The latest 5 year gilt auction (wednesday) was x3 over subscribed.
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Harry Trout on 11/01/2025(UTC), Peanuts on 11/01/2025(UTC)
Harry Trout
Posted: 11 January 2025 11:29:03(UTC)
#26

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Individual conventional gilts were 17.2% of our portfolio at the 2024 year end and VGOV / VUTY were less than 1% combined.

So I like the individual ones for precise liability matching and their potential to form a bond ladder for that purpose - we are moving house in a few years time for example

However, if you have a Vanguard account and like the price in the run up to 10:15am or 14:10 pm on a working day then it's worth noting that trades there carry no transaction charge. You just need to place the trade before 10:15am / 14:10pm.

For example, I picked up a few VGOV this week to reduce my average cost and for a bit of fun really on the dip

I'm really looking for a trading opportunity rather than building a long term position with VGOV, individual gilts being my preference

Also VGOV does provide a hedge against falls in BOE base rates
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Fell Walker on 11/01/2025(UTC), MarkSp on 11/01/2025(UTC), Busy doing nothing on 11/01/2025(UTC), Chris1947 on 11/01/2025(UTC), Peanuts on 11/01/2025(UTC), markydeedrop on 01/02/2025(UTC)
Peanuts
Posted: 11 January 2025 18:12:57(UTC)
#22

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Busy doing nothing;330787 wrote:
The latest 5 year gilt auction (wednesday) was x3 over subscribed.


Mmmmmm I'm not sure if 3x is actually considered as a good indication or not for demand of the 5yr gilt but for reference back in Sept last year the DMO auction was 10x oversubscribed for (I think) a 15yr bond at 4.375%

Yields higher. More issuance. More economic holes. Trump. Different day. Lets see what the future auctions attract...
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Busy doing nothing on 11/01/2025(UTC)
Peanuts
Posted: 16 January 2025 07:05:46(UTC)
#27

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Ok so apparently demand was slightly less than previous auctions for this weeks DMO auctions.

Can't find the source for it but this on X - "According to Goldman Sachs’ investment strategy group, gilts have the best prospective returns of any global asset this year, with a projected return of 12%."

Fingers crossed then..
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Bob Brook
Posted: 16 January 2025 08:09:50(UTC)
#23

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Peanuts;330825 wrote:
Busy doing nothing;330787 wrote:
The latest 5 year gilt auction (wednesday) was x3 over subscribed.


Mmmmmm I'm not sure if 3x is actually considered as a good indication or not for demand of the 5yr gilt but for reference back in Sept last year the DMO auction was 10x oversubscribed for (I think) a 15yr bond at 4.375%

Yields higher. More issuance. More economic holes. Trump. Different day. Lets see what the future auctions attract...


10x sounds like a lot. According to the DMO in 23/24 the average cover rate was 2.78.

You can see here all gilt auctions that covers the period of Sept last year, I cant see a 15 yr one but the 4.375% 2054 gilt auction had a cover rate of 2.89. The bid to cover ratio has not materially changed yet.
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Peanuts on 16/01/2025(UTC), Sheerman on 16/01/2025(UTC)
Peanuts
Posted: 16 January 2025 08:35:37(UTC)
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Bob Brook;331214 wrote:


10x sounds like a lot.



Yes I thought exactly the same. I am probably wrong, or read it wrong (probably), but it was from this article below. Admittedly I don't follow the auctions but do like to know if the demand is up or down - which is probably safest indicator to follow. Thanks for link to auctions



https://www.theguardian....ll-a-haven-for-investors
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allocator3844 on 16/01/2025(UTC)
Peanuts
Posted: 22 January 2025 08:52:07(UTC)
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Peanuts;331219 wrote:
Bob Brook;331214 wrote:


10x sounds like a lot.



Yes I thought exactly the same. I am probably wrong, or read it wrong (probably), but it was from this article below. Admittedly I don't follow the auctions but do like to know if the demand is up or down - which is probably safest indicator to follow. Thanks for link to auctions



https://www.theguardian....ll-a-haven-for-investors



Ok so maybe I did read correctly (10x) as the latest 15yr gilt auction attracted 14x so massive demand for the 2040 gilt.
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SF100
Posted: 01 February 2025 20:00:59(UTC)
#28

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so what's everyone doing with their recently matured TN25 gilt monies?
there must be a few million looking for a new home...

I have to say, a poke at the 10-year gilt at say '5.7% equivalent for basic-rate-taxers' is quite appealing, given the crappy cap gains tax free allowance these days.
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Guest on 02/02/2025(UTC)
Peanuts
Posted: 05 February 2025 06:48:49(UTC)
#29

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Morningstar

"The DMO sold 4.25 billion pounds in March 2030-dated gilts at an auction on Tuesday"

The following are results of the auction

Figures in brackets are data from the previous auction, held on Jan. 8, 2025.

Issue 4.375% March 7 2030 gilt
Amount on offer 4.25 bln
Bids received 12.95 bln
Bids accepted 4.25 bln
Bid-to-cover ratio 3.05 (3.00)
Average yield 4.276% (4.490%)
Average price 100.43 (99.46)
Maximum yield 4.281% (4.496%)
Settlement date February 5, 2025
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GARRY TAYLOR on 05/02/2025(UTC), L.P. on 05/02/2025(UTC)
Peanuts
Posted: 19 February 2025 07:21:54(UTC)
#30

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From Morningstar

The U.K's Debt Management Office sold 1.75 billion pounds in October 2063-dated gilts at an auction on Tuesday

The following are results of the auction. Figures in brackets are data from the previous auction, held on June 4, 2024.

Issue 4.0% October 22 2063 gilt
Amount on offer 1.75 bln
Bids received 4.90 bln
Bids accepted 1.75 bln
Bid-to-cover ratio 2.80 (3.10)
Average yield 5.076% (4.557%)
Average price 81.84 (89.85)
Maximum yield 5.079% (4.570%)
Settlement date February 19, 2025
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Micawber on 19/02/2025(UTC), Busy doing nothing on 19/02/2025(UTC)
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