Author: Helen Barklam

Every year, UK- based investors benefit from a capital gains tax (‘CGT’) allowance. This allowance means that up to a certain value (£12,300 in the 2020/21 tax year), UK individuals do not pay any capital gains tax on any profit they make on disposal of assets. If unused, the capital gains tax allowance cannot be carried forward to the following tax year. This ‘use it or lose it’ style rule meant that investors holding assets such as individual shares or holdings in funds would sell their assets prior to the end of the tax year before quickly repurchasing them in…

This guide starts with the basics of what fixed income investments are and expands to explain how bonds are priced, how credit rating agencies grade bonds and how best to cost effectively invest in fixed income investments. What are fixed income investments? Fixed income investments are debt investments where you are effectively loaning money either to Governments (gilts or gilt-edged securities, also known as treasuries or sovereign debt) or companies (corporate bonds). When you make a fixed income investment in a gilt or corporate bond, the lending Government or company typically agrees to pay you a fixed rate of interest…

Investment funds pools the capital of many individual investors to invest in one or more types of underlying financial securities. In the UK, investment funds are either open-ended investments companies (‘OEICs’) or Unit Trusts. Investment funds typically hold shares (which pay dividends), bonds (which pay interest) or a mixture of both. These dividends / interest payments are forms of income. The type of share (in the case of OIECs) or unit (in the case of Unit Trusts) you hold determines how this income is treated. Income funds With income shares/units, income from the fund is paid out to investors in…

What are share options? Share options are a type of financial security. When investing in share options, you are purchasing a contract which gives you the right (but not obligation) to buy or sell a certain number of shares at a fixed price either at any time before the option expires. Investors pay a premium for this right. Option contracts can also be taken out on other markets such as bonds, commodities, forex markets and stock market indices. How do share options work? There are two types of share options – call options (a contract to buy shares at a…

Index-linked savings certificates are tax-free bonds issued by National Savings and Investments (NSI). These bonds are no longer available to the general public, but are still available to existing savers who can opt to renew for a 2-year, 3-year or 5-year term on maturity. Historically, these investments were a way of linking your investment to the Retail Price Index (RPI) to ensure that your cash savings kept pace with inflation. In addition, NSI paid a small fixed rate of interest on top of RPI. However, in May 2019, NSI changed its policy to state that any maturing certificates which are…

Are you intrigued to learn more about fine wine investment? Perhaps you are actively considering investing in fine wine? Either way, this ‘investing in wine’ guide will seek to meet your needs by giving you all of the information you need to get started on your wine education or investment journey. Investing in wine Passion vs. investment You may love wine. Drinking it, smelling it, tasting it, enjoying it with friends. That’s great and I do too, but it’s important to ensure that a love of wine does not cloud your judgement when considering fine wine as a prospective investment.…

Pound cost averaging is the concept of drip feeding your cash into an underlying investment rather than investing in one larger lump sum. The concept is most typically cited when considering making an investment in the stock market via individual shares or funds. The rationale for pound cost averaging is that equity markets can be volatile, which means the value of investments could fluctuate significantly in the short term. By drip feeding your cash into the markets, you are providing yourself with some protection in case the market falls shortly after you have invested. Of course, the problem is that…

An investment fund is an investment vehicle which pools the funds of many individual investors. These funds are actively managed by a professional fund manager, or passively managed in the case of exchange traded funds (‘ETFs’). Regardless of structure, funds typically focus on one singular asset class. However, some funds are multi-asset and hold a combination of asset classes. The most common asset classes include equities, debt (gilts, investment grade bonds, high yield or junk bonds) and alternative investments (property, commodities). This article will explain how various types of investment funds differ, including: Types of investment fundPublic open-ended fundsPublic closed-ended…

Execution only share dealing is where a broker purely executes an investors buy or sell instructions, rather than providing any investment advice to that investor or acting on the investors behalf based on granted authority. Most private investors use execution only investment platforms as opposed to advisory brokers (who provide advice) or discretionary brokers (who act on your behalf), both of which feature higher costs. Examples of execution only investment platforms are Hargreaves Lansdown, AJ Bell YouInvest, Interactive Investor and Fidelity. If you are looking for an execution only share dealing platform, read our cost comparison articles covering the best…