A gilt-edged security (or gilt) is a fixed-interest security or stock issued by the British government in the form of Exchequerstocks or Treasury stocks. Gilts are among the safest of all investments, as the government is unlikely to default on interest or on principal repayments. They may be irredeemable or redeemable. Redeemable gilts are classified as: long-dated gilts or longs (not redeemable for fifteen years or more), medium-dated gilts or mediums (redeemable in five to fifteen years), or short-dated gilts or shorts (redeemable in less than five years). Like most fixed-interest securities, gilts are sensitive not only to interest rates but also inflation rates. This led the government to introduce index-linked gilts in the 1970s, with interest payments moving in a specified way relative to inflation. Most gilts are issued in units of œ100. If they pay a high rate of interest (i.e. higher than the current rate) a œ100 unit may be worth more than œ 100 for a period of its life, even though it will only pay œ100 on redemption. Research Gilt-Edged Security
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Abbreviations
Research Gilt-Edged Security
