Not only have total rates of return (income plus capital appreciation) been positive for a period of years, but since 1990, with the global fall in real interest rates, we have also had the almost unprecedented experience of seeing real increases in the capital value of gilts as well.As the chart shows, the overall performance of gilts (after allowing for tax at the basic rate and for the effects of inflation) has been steadily upward since around 1980. Anyone who bought gilts in the 1960s and reinvested the income would have seen the value of their investment roughly halve in real terms by the mid to late-1970s.Since then, however, their performance has been steadily improving, helped by the worldwide assault on inflation by governments. For a higher-rate taxpayer, the long-run real rate of return from shares falls from 6 to just over 4 per cent per annum.Gilts are a rather different story. For most of the post-war period, they have been a disaster as an investment class.

Inflation is the great enemy of all fixed-interest securities and,with the concomitant high level of interest rates, ruined the value of all types of gilts for many years. As regular readers will know, I have been promoting the attractions of gilts as a sensible home for investment capital for some time, and it is encouraging to find a lot of supportive arguments for this in the Barclays study. What the survey shows in essence is that gilts, having been for years the pariahs of the investment community, are once more an attractive and sensible proposition for investors.
The main message of the Barclays study remains, as it has been since it was first launched in the mid 1950s, that equities are the best asset class for long-term investors. The data in the study goes back to 1918 and shows, if you are prepared to hold your portfolio of shares for 20 years, you are, in effect, immune from the risk of losing money.Despite two world wars, Opec and all the rest of the 20th century’s horrors, there has been no 20-year period this century during which you would not have shown a positive real return from holding a broadly based equity portfolio.At a global level, the Barclays data supports the view that equities are superior long-term, but the margin of superiority is obviously not so clear-cut.For example, its calculations show that if your transactions costs amount to just 1 per cent of your portfolio’s value each year, it can cut the final value of your portfolio by 50 per cent over a long period.

For a free copy, write to Midland Stockbrokers, Perks Guide, Marketing Department, Mariner House, Pepys Street, London EC3N 4DA, enclosing a self-addressed A4 or A5 size envelope.. Some more thoughts this week on the subject of equities versus gilts, prompted by the publication of Barclays Capital’s annual gilts- equity survey. For example, there may be reduced accommodation costs from a hotel chain; a discount on sundry items purchased from a high street retailer or even a modest price reduction on a new home! The rules vary: some companies insist on a minimum level of shares being held, perhaps for a minimum period, while others are happy to give the concession to all.Of course, no investment decision should be made on the basis of the perks. The normal criteria for selecting shares for your portfolio should always prevail.Midland Stockbrokers has compiled a list of companies that offer perks in a wide variety of categories It also details the terms of the offers. A copy of the resolution must be sent to all shareholders – companies are allowed to charge for the cost of their circulation.Increasingly, more companies are giving shareholders perks.

Resolutions must be submitted no less than six weeks before the meeting. Those who do not wish to attend may vote by post.Under company law, shareholders can also put forward motions if they can muster 5 per cent of the company’s total voting rights, or 100 shareholders, each with at least pounds 100 worth of shares. For example, Cadbury Schweppes has given chocolates and Hillsdown a bag of groceries. However, even if the AGM is at noon, do not expect a buffet lunch. You will usually be offered a drink, or coffee and biscuits.The purpose of AGMs is for shareholders to vote on important matters affecting the company, such as raising more capital by a rights issue or appointing and dismissing directors or auditors Shareholders are invited to ask the chairman questions. While the vast majority are sedate affairs, some can be quite lively. For example, the attendance of Cedric the Pig at British Gas’s AGM in protest at Cedric Brown’s remuneration package.It is not unknown for companies to give shareholders who attend handouts.