Key Information ISIN GB00BT7J0241 TIDM T56 Exchange LSE Par Value £100 Maturity Date 31/1/2056 Coupons per year 2 Next coupon date 31/7/25 e Coupon 5.375% Income Yield 5.39% Gross redemption yield 5.38%
An alternative to using the 4% rule would be to buy a gilt ladder or a U$ Treasury ladder.
Pointers to know.
If you buy a gilt below or around its issue price, with a gilt it’s £100, you will not lose any of your hard earned if you own until maturity.
Using the table above.
The yield is 5.38%, so you would receive two income payments a year.
If you hold until 31/01/2056, you will receive your cash back without taking any action. Between now and 2056 a lot will happen with interest rates.
If they continue to fall, you should be able to flip your position at a profit. Although you might find it difficult to re-invest the funds at a decent interest rate.
If/when interest rates rise, the price of your gilt will fall and you will be locked into your position, although you could then add to your position at a better rate than 5.38%
In general if your want to buy gilts outside a tax free wrapper, you need to buy a low coupon as any capital gains are tax free.
Key Information ISIN GB00BL68HH02 TIDM TG30 Exchange LSE Par Value £100 Maturity Date 22/10/2030 Coupons per year 2 Next coupon date 22/10/25 e Coupon 0.375% Income Yield 0.45% Gross redemption yield 4.04%
Inside a tax wrapper, the world’s your onion.
One strategy would be to buy several different years, then when the gilt matures you may or may not be able to re-invest at a higher rate but you could spend your hard earned on you or your family.
The bond market: a once-in-a-decade opportunity to lock in passive income?
Story by Dr. James Fox
Bonds have long been a cornerstone for investors seeking steady, predictable passive income. But with yields at multi-year highs, the bond market is now offering a rare chance to lock in attractive returns with relatively low risk. This combination is drawing new attention from UK investors.
How do bonds work ?
A bond is essentially a loan an investor makes to a government or corporation. In exchange for the money, the issuer promises to pay the bond holder regular interest (known as the coupon) and to return the original investment (the principal) when the bond matures. Bonds are considered fixed-income investments because they typically pay a set interest rate over their life, making them a popular choice for those seeking reliable income streams.
The appeal of bonds for passive income is straightforward, especially now. For example, UK government bonds (gilts) are currently offering yields not seen in over a decade. The 10-year gilt yield stands at around 4.65%, while the 30-year yield is just over 5.4%.
This means that if someone were to invest £10,000 in a 10-year gilt, they could expect to receive £470 per year in interest — more than double what they would have earned five years ago. The only significant risk is if the UK government were to default on its obligations. However, this is widely considered extremely unlikely, making gilts far less risky than most stocks.
Looking overseas Across the Atlantic, US Treasury bonds are also offering attractive yields. The 10-year US Treasury yield is currently about 4.46%, and the 30-year yield is just under 5%. These rates are historically high for such safe assets. This higher-than-usual yield reflects near-term economic uncertainty and Trump’s plans for potentially unfunded tax cuts. But it also offers investors a rare window to lock in high passive income for years to come.
For those willing to look further afield, some overseas bonds offer even higher yields, especially in emerging markets or countries facing economic challenges. While these can provide eye-catching income, they also come with increased risk, including currency fluctuations and the potential for default. For example, the South African 10-year bond yields over 10%.
Alternative exposure Bond investing might not be for everyone. And thankfully lots of stocks offer exposure to the bond market. One of the best known is Berkshire Hathaway (NYSE:BRK.B) which offers partial bond market exposure due to its massive holdings in US Treasury bills, which provide steady interest income and stability.
Berkshire now holds over $300bn in US Treasury’s — accounting for nearly 5% of the entire market for short-term government debt. While Berkshire is a conglomerate, its defensive cash position, debt holdings, and diversified business operations help buffer against market volatility, offering shareholders indirect benefits from bond market returns.’
However, this Warren Buffett company is not a direct substitute for bond funds, as most of its value comes from operating businesses and a concentrated equity portfolio, not fixed-income assets.
And while the company has performed well in recent years, there’s going to be some uncertainty for this US-focused business going forward. It’s a stock I own and recently bought more of, but I appreciate that Trump’s policy may cause some volatility. Also, it doesn’t pay a dividend, so there’s no yield — just growth, hopefully.
If Peter had held on to that $90,000 inheritance, it would be worth a cool half a billion today. That’s the magic of Warren Buffett’s famous snowball philosophy: keep reinvesting, let it grow, and watch as your money works harder than you ever could.
The current fcast for the Snowball is to earn dividends of £9,120 to be re-invested back into the portfolio. The target is 10k which will be met as there is a return of capital from VPC, which part of can be used as a dividend top up if required.
The fcast for next year could be increased to £9,800, which is the figure in the plan for the year ending 2028 but the target as yet undecided. Remember if you can compound your dividend income at 7% pa it doubles every ten years. Compounding takes a while to grow, so the sooner you start the better your retirement will be. Better if you can ‘add fuel to the fire’ but the Snowball will only use seed capital.
At present the Snowball should receive around £3,200 in dividends in June and when re-invested should provide some income for this year but an additional £250 for next year, plus all dividends earned and re-invested in the second half of this year.
You may have missed your window on this infrastructure trust’s share price.
As the discount narrows to a fairer price, the potential upside has dwindled
Markuz Jaffe
Questor is The Telegraph’s stock-picking column, helping you decode the markets and offering insights on where to invest.
Investors after stable, inflation-linked returns backed by high quality counterparties could do worse than infrastructure. Sub-sectors of the asset class span social infrastructure, such as hospitals and schools, and more economically sensitive investments, such as power generation and transport.
More recently, the significant expansion in digital infrastructure, including data centres, towers and fibre, has captured headlines, driven by the explosion in data consumption globally.
One such access point is Pantheon Infrastructure (PINT), launched in late 2021 with the aim of offering a globally diversified portfolio of high-quality infrastructure assets, co-investing alongside leading private equity houses via individual deals selected by PINT’s manager. Since launch, the company has committed over £500m of investor capital across 13 investments.
PINT’s investment manager, Pantheon, has over 40 years of private markets investing experience, a global investment team and $71bn in discretionary assets under management across real assets, private equity and private credit, as at end-September 2024. This includes $23bn across over 230 private infrastructure investments, of which $4.5bn is invested across 56 private infrastructure co-investments – a significant resource benefitting PINT, despite the trust’s own modest size.
The portfolio is well diversified by sector, with almost half in digital infrastructure, a third in power and utilities and a quarter spread across renewables and energy efficiency, and transport and logistics.
It invests across Europe, North America and the UK, and enjoys a blend of revenue profiles – with the vast majority contracted, supported by almost a fifth in GDP-linked and regulated incomes. To further spread risk, the company makes use of an active currency hedging programme to help reduce portfolio valuation fluctuations due to FX movements.
PINT’s top investments by value highlight this diversification: Calpine, a principally gas-fired US independent power producer; Fudura, a Dutch provider of electricity infrastructure; Primafrio, a European temperature-controlled transportation and logistics firm; National Broadband Ireland, a network developer and operator for the nation; and National Gas, owner and operator of the UK’s sole gas transmission network.
Of these holdings, the most immediately attractive is Calpine, which is set to be bought by Constellation Energy Corporation (CEG). The deal, expected to complete later this year, will grant PINT a mix of CEG shares and cash, split 75pc and 25pc, respectively. While this has introduced some volatility into PINT’s portfolio valuation – the share price of CEG has ranged from a peak of around $350 to a low of $170 in 2025 alone – it also represents PINT’s first disposal, and a potentially significant exit from one of its top performing investments to date.
PINT targets a net asset value (Nav) total return of 8-10pc per annum, and declared dividends of 4.2p for FY24. Although dividend cover was relatively low for the year (0.7x), the manager expects this to improve as portfolio distributions continue to increase.
PINT’s method of accessing these deals via co-investing is a differentiator from peers and provides investors with a fee-efficient exposure to a basket of quality companies that stand to benefit from secular trends of digitisation, decarbonisation and deglobalisation. PINT itself charges a modest 1pc per annum management fee on the first £750m of net assets, with no performance or transaction fees. Additionally, the portfolio’s weighted average discount rate of 13.6pc as at end-December 2024 highlights the high level of return that the underlying businesses are expected to achieve based on their valuation modelling.
The company has a conservative balance sheet, with no debt drawn at the trust level. PINT’s £115m revolving credit facility provides liquidity but was undrawn at yearend and, combined with £24m in cash against outstanding investment commitments of £19m, marks a robust position for this strategy.
PINT’s board has been proactive in addressing the discount at which the shares trade relative to the published Nav, having allocated £18m to share buybacks, which have been used intermittently. The board has also recognised feedback from shareholders to recycle proceeds from realisations into new investment opportunities.
Since we last tipped PINT, the trust has benefited from a further share price recovery to trade at around 99p, representing a 16pc discount to published net asset value (or 18pc discount after accounting for estimated Calpine disposal uplift).
This has been supported by a strong period of fundamental performance across the portfolio, the potential for a material exit to complete and improving dividend cover from a maturing portfolio. However, we note that this re-rating has brought PINT’s discount to a level we see as fairly valued, limiting near-term upside potential.
Questor says: hold Ticker: PINT Share price: 99.4p
CT UK High Income Trust outperforms and hikes dividends again
QuotedData
Matthew Read
CT UK High Income Trust (CHI) has published its audited results for the year ended 31 March 2025, delivering another year of outperformance and a twelfth consecutive annual increase in distributions to shareholders. Over the financial year, the trust’s NAV total return was +13.5%, comfortably ahead of the FTSE All-Share Index’s +10.5% return. Share price total returns were even stronger, at +25.0% for ordinary shares and +24.0% for B shares, as market demand narrowed the discounts on both share classes.
No continuation vote required
Over the three-year performance measurement period (1 April 2022 to 31 March 2025), the trust delivered an NAV total return of +26.6%, outperforming the benchmark return of +23.3%. As this exceeded the board’s performance threshold, no continuation vote will be required at the 2025 AGM.
Income and dividends
The trust continues to focus on delivering a high and growing income. Total distributions rose by 3.0% to 5.79p per share, equating to a yield of 5.8% on the ordinary shares and 6.0% on the B shares at the year-end. A strong uplift in earnings (up 19.7%) enabled a transfer of £635,000 to the revenue reserve, which now stands at £2.9m – equivalent to 60% of the current annual dividend.
Portfolio activity and gearing
Manager David Moss highlighted successful stock selection as the main driver of outperformance, with strong contributions from NatWest, Rolls-Royce, Shell, and a re-rating in Hargreaves Lansdown following a private equity takeover. The trust also added holdings such as HSBC, Taylor Wimpey, and Breedon Group, while reducing exposure to Vistry and CRH.
Although structurally geared, leverage was tactically reduced in early 2025 amid growing macro volatility – particularly around the re-election of Donald Trump and his tariff agenda. As of year-end, £15m of the trust’s revolving credit facility had been drawn, with £9.5m held in cash.
Share issuance and discount management
Reflecting improved sentiment, the trust’s odinary shares ended the year at a 2.1% discount to NAV, while B shares traded at a 4.1% discount. The trust was one of the few in the sector to issue new shares, with 1m ordinary shares resold from treasury at a premium to NAV. Conversely, 250,000 B shares were bought back into treasury at a discount.
Outlook
Chairman Andrew Watkins struck a cautious but ultimately optimistic tone, noting ongoing challenges from high interest rates, UK fiscal policy, and geopolitical tensions. Nevertheless, he expressed confidence in the portfolio’s positioning and praised Moss’s ongoing stewardship. The manager remains focused on identifying undervalued UK equities with strong dividend-paying capacity, noting the potential for further income and capital growth in a still-overlooked domestic market.
[QD comment MR: This is a decent set of results from CT UK High Income Trust. While it has outperformed during the last financial year, these results confirm its outperformance over three years, which has allowed it to dispense with a continuation vote this year.
The NAV total return of 13.5% over the year looks solid given the uncertain macro backdrop and, with the UK equity market still trading at historically wide discounts to global peers, it, and its peers that are focused on UK equities, should be well-placed to benefit from any reappraisal of UK valuations. The ongoing bid activity in UK equities adds weight to the argument that investors who are avoiding the UK could miss out. In the meantime, twelve consecutive years of dividend increases, along with the rebuilding of the revenue reserve, provide some comfort to income-seeking investors amid a still-uncertain economic outlook.]
