AJ Bell Investcentre has launched a gilt model portfolio service (MPS) range.
The AJ Bell Gilt MPS range will carry a low investment management charge of 0.10% per year, amid rising adviser demand for a low-cost, accessible solution to recommend gilts to clients.
The investment platform said the new range is designed for advisers and their clients who are looking to invest in a tax efficient MPS and will be available across three different maturity preferences, allowing advisers to choose an investment time horizon and gilt maturity dates that suit their clients’ needs.
Advised clients can invest in the Gilt MPS range with as little as £10,000, which the firm said will allow clients across a broad spectrum of wealth profiles to benefit from the opportunities currently offered by gilts.
Ryan Hughes, managing director of AJ Bell Investments, said: “UK gilts have become highly tax efficient investments in recent times, particularly for higher and additional rate taxpayers given any gains made on gilts are exempt from capital gains tax.
“With some gilts trading below ‘par’ and offering a low coupon, it means that a good proportion of the return, if held to maturity, comes from capital gains rather than from income. As a result, when the yields on offer are held up next to the interest rates available on deposit, gilts compare very favourably when focussed on the short-dated part of the market.”
Hughes said AJ Bell’s discussions with advisers had found that many were unable to buy gilts directly for their clients.
“We are therefore delighted to launch the Gilt MPS which brings a ‘ladder’ approach, providing advisers with a range of maturity options wrapped in an MPS structure. This part of the market has up to now been seen as the preserve of the very wealthy through traditional DFM managers with high minimum investment levels and high costs, but our new MPS range opens the door for many more investors with a suggested minimum investment level of £10,000 and very low charges at just 0.10% per annum,” he added.
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