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Invesco debuts cheapest gilt ETFs amid slew of bond fund launches

Invesco has launched the cheapest UK government bond ETFs
Invesco debuts cheapest gilt ETFs amid slew of bond fund launches

Invesco has launched two exchange traded funds (ETFs) that track UK government bonds and have ongoing charges of 0.06 per cent. They are the cheapest ETFs tracking these kinds of assets available to private investors.

Invesco UK Gilt 1-5 Year UCITS ETF (GLT5) tracks Bloomberg Barclays UK Gilt 1-5 Years index and has lower exposure to interest rate risk because it invests in lower duration bonds, which have become more popular as expectations increase that the Bank of England will raise interest rates. Invesco UK Gilts UCITS ETF (GLTP) tracks Bloomberg Barclays UK Gilt index, and they both buy the bonds they track rather than getting their exposure via derivatives like some ETFs.

iShares, Vanguard and Lyxor also offer ETFs that track UK government bonds. The cheapest of these three is Lyxor Core FTSE Actuaries UK Gilts UCITS ETF (GILS) with an ongoing charge of 0.07 per cent. iShares Core UK Gilts UCITS ETF (IGLT) has the most assets under management with £1.6bn, but it has a higher ongoing charge of 0.2 per cent.

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