What is a Long Gilt?
Long Gilts are bonds that are issued by the British government. ‘Gilt’ originates from the original British government certificates that had gilded edges.
Gilts are the U.K. version of U.S. Treasury securities. Investors consider the Long Gilt low risk as they are backed by the British government. Long Gilts have a long maturity, that being 8 years and 9 months to 13 years.
Uses for Long Gilt
Long Gilts are very popular futures investments due them being recognised as a low risk investment. The main purchasers of gilts are pension funds as well as life insurers.
Risks of Long Gilt
Long Gilts are seen as a safe investment. The notes are issued by the government and as such they are government backed. With this low risk comes a low return on investment.