Virgin Bond and Gilt Fund - Earn a regular income with lower risk to your capital

How it works

How bonds & gilts work

Just like with shares, when you invest in corporate bonds you invest in companies - by buying their bonds on a stock market. Corporate bonds are basically IOUs issued by companies looking to raise finance from investors. In return they pay out a steady stream of interest. You can leave the interest to grow in your investment or have it paid out to you as income every six months.

One big plus with bonds is that they don’t go through the roller-coaster ride share prices often do. Also the regular interest payments to bondholders are guaranteed, whereas dividend payments to shareholders are not. And should a company ever get into trouble, bondholders are paid out before shareholders in the pecking order. A gilt works in much the same way except you’re investing in the Government rather than a company, which should make them more secure.

Remember
Bonds and gilts are different to saving in a risk-free deposit account. Their value and the interest they pay out can go down as well as up and there are no guarantees you’ll get back the full amount you invested. To maximise your chances of a good return you should be looking to invest for several years. As always, past performance isn’t a guide to the future.

How it works

Choose growth or income

Investing for growth
If you are investing in our Bond & Gilt Fund to grow your savings, when you fill out the application form you simply need to opt to have your income reinvested. Instead of paying out a regular income, we'll reinvest the money to buy more units in the fund.

Investing for income
If you're investing for income, tick the box on your application form to have it paid out to you. The fund will then collect all the interest payments from companies and make sure your income is paid into your bank account twice a year.

How it works

How much income and when?

You get an income paid every six months. The amount you get depends on two main things. Firstly, how much you invest. And secondly, what the current interest yield is of our Bond & Gilt fund at the time you invest.

If you invest between 2 October and 1 April you’ll receive your first income payment on, or shortly before, 1 June.

If you invest between 2 April and 1 October, you’ll receive your first income payment on, or shortly before, 1 December.

How it works

The value of the investment can still fluctuate

Bonds & gilts are different to saving in a risk-free deposit account - with bonds and gilts, their value, plus the interest the fund receives from the bonds and gilts it holds, can go down as well as up on a daily basis, with no guarantees you’ll get back the full amount you invest.

To maximise your chances of a good return you should be looking to invest for several years.

It’s also worth remembering that the past performance of a fund isn’t a guide to how well it may do in the future.