u/BastiatF

In Modern Portfolio Theory, the efficient portfolio holds a portion in fixed income assets to reduce risk. Typically in the UK this has meant holding UK government bond funds. However these funds have proven quite risky after Covid when interest rates spiked.

An alternative is to hold it directly in gilts and with yields recently rising, they are becoming quite attractive. They too are sensitive to interest rates but, unlike bond funds, permanent capital loss can be avoided by holding to maturity.

More practically it could even be held in the form of a gilt ladder matching expected spending in retirement.

Any reason not to go for gilts instead of a government bond fund?