The selling and repurchasing of certain high-grade stocks or bonds to capture profits. Gilt-edged switching involves gilt-edged security, which can be high-grade stock or bond issued by a financially stable company such as the Blue Chip companies or by certain governments. They are considered to be low-risk investments because they are backed by strong, established entities. Gilt-edged securities are generally inversely linked to interest rates, and therefore experience price fluctuations.
Gilt-edged switching is utilized by governments like those of the United Kingdom, South Africa and Ireland. An example of a Gilt-edged switching selling one bond in favor of another one. Higher-yielding bonds may increase the potential for profit. Gilt-edged switching may also involve selling one bond at a discount in order to purchase a more favorably yielding instrument.
Investment dictionary. Academic. 2012.
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United Kingdom — a kingdom in NW Europe, consisting of Great Britain and Northern Ireland: formerly comprising Great Britain and Ireland 1801 1922. 58,610,182; 94,242 sq. mi. (244,100 sq. km). Cap.: London. Abbr.: U.K. Official name, United Kingdom of Great… … Universalium