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Glasgow
+44 (0)141 221 2984

Edinburgh
+44 (0)131 225 6366

Stirling
+44 (0)1786 451745

Dumbarton
+44 (0)1389 765238

Hamilton
+44 (0)1698 459444

French Duncan

Barclays Equity Gilt Study

10 March 2014

The Barclays Equity Gilt Study (EGS), now in its 59th edition, is one of the most frequently quoted sources of long term stock market performance. Barclays’ data on UK investment performance goes back to 1899, giving it a perspective few can match. A good example is a table in the study that shows the inflation-adjusted performance of UK shares, gilts (government bonds) and cash (Treasury bills) for ten yearly periods starting in 1903, reproduced below in graphical form.

Ten Year Real Returns

Source: Barclays Capital. Post-inflation returns, gross income reinvested.


One surprising aspect of these numbers is that over the last ten years, to quote Barclays “Cash … delivered the worst returns since the stagflationary 1970s”. While inflation was memorably high in the 1970s and early 1980s – 1975 saw annual inflation of 24.9% – interest rates were also at peak levels – base rate reached 17% in 1979. In the last ten years inflation has been largely under control – if not within the Bank of England’s target – but the last five years of 0.5% base rates (see above) have hit post-inflation returns.


The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances.

 

If you have any questions or would like further advice please contact us by email or call on 0141 221 2984.