The retirement of War Loan Stk. 3½ attracted surprisingly little attention following its announcement in the Chancellor of the Exchequer’s budget.

This year will see the repayment of one of the UK’s oldest and most idiosyncratic securities which, over the course of its existence, has traded at prices above £100 and as low as £20.

After 100 years in issue, the bond has outlived its initial investors, who bought the bonds to help fund Britain’s military in the First World War.

The bond’s performance from its issue date was dire and well below inflation. But from its nadir, in the 1970s, the bond is probably one of Britain’s best performing securities. At £20, it sat on a yield of 17.5% and has delivered a capital gain of 3.9% annualised, for a headline annual yield of 21.4%.

That beats Warren Buffett’s efforts at Berkshire Hathaway (BRK.A:NYSE) of 19.7% since 1965, on an annual basis. As the bond’s coupons could not always be reinvested at 17.5%, the compounded return, however, is much lower.

Issue Date: 08 Jan 2015