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Zero coupon bonds

Zero coupon bond

What is a zero coupon bond?

A zero coupon bond is a bond that does not make interest payments.

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This type of bond is issued at a discount to its maturity value and is redeemed at the maturity value, generating a return for the investor.

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UK Treasury bills are an example of a zero coupon bond.

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Zero coupon bonds can be issued by governments, municipalities, and companies.

More terms

Maturity date

The date on which a gilt is redeemed and the gilt holder receives the repayment of the nominal amount and final dividend or coupon payment.

Net asset value

Mutual funds and investment trusts are priced on their net asset value (NAV).

Accounting standards

The rules a company follows when preparing financial statements.

Geometric Mean Return

A way of calculating compound returns on an investment or savings over a set period of time.

52-week high/low

The highest, or lowest, price a share has traded at in a passing year.

Venture Capital Trust (VCT)

A listed company run by a fund manager, investing mainly in private companies.e.

Balance sheet

A summary of a company's finances, including its assets, liabilities and shareholder equity.

Xetra

A trading venue operated by the Frankfurt Stock Exchange.

Collective investment scheme

Learn what's a collective investment scheme

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