AJ Bell Investments has broadened its Gilt Model Portfolio Solutions range with the addition of three new portfolios.
The new portfolios, with maturity dates out until 2032, will enable advisers and clients to benefit from a wider range of maturity options using the Gilt MPS ‘ladder’ approach, the firm said.
It follows the launch of the Gilt MPS 4 portfolio last December, which now accounts for around a quarter of all assets under management across the entire Gilt MPS range. The investment platform said there is significant demand for longer maturity Gilt MPS portfolios alongside the existing range of portfolios with maturity dates that start from later this year.
The AJ Bell Gilt MPS range of new and existing portfolios will also be renamed to reflect their maturity dates.
AJ Bell said gilts are particularly effective for higher or additional rate taxpayers, as capital returns are free from capital gains tax and short-dated low coupon gilts can offer favourable yields.
The Gilt MPS purchases gilts below par, meaning most of the return comes from the capital gain at the point of maturity, which is tax-free when using gilts. For example, compared with a fixed rate cash savings account paying 4.1%, an equivalent £100,000 investment could result in an extra £525 for higher rate tax paying client portfolios after income tax on savings interest is deducted.
Ryan Hughes, managing director at AJ Bell Investments, said: “Since we launched our Gilt MPS range just under a year ago, we’ve seen a surge in demand from advisers looking for flexible, tax efficient investment solutions to protect client wealth.
“After seeing significant appetite for the first three portfolios launched as part of the range, our fourth Gilt MPS portfolio released in December last year has already seen considerable inflows. We are therefore meeting that demand directly by launching three new Gilt MPS portfolios to give advisers even more flexibility.
“As we approach the end of the tax year, advisers will be well positioned to support clients looking for alternative ways to protect their wealth while earning a secure return in a tax efficient manner. Higher and additional rate taxpayers are even better placed when considering the gross equivalent yield versus a cash savings account – something that will become even more prominent when tax on savings interest increases by two percentage points from April 2027.”
The Gilt MPS range carries an investment management charge of 0.10% per annum, and advised clients can invest in the range starting with £10,000. AJ Bell said this means more clients across a broad spectrum of wealth profiles can benefit from the tax planning and investment opportunities currently offered by gilts.
Hughes added: “By expanding our range of portfolios out to 2032, advisers and their clients will be able to utilise an even wider range of maturity options using the Gilt MPS ‘ladder’ approach.”
Past performance is not a reliable guide to future returns. You may not get back the amount originally invested, and tax rules can change over time. The writer’s views are their own and do not constitute financial advice.
This information should not be relied upon by retail clients or investment professionals. Reference to any particular investment does not constitute a recommendation to buy or sell the investment.
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