A portfolio can hold several gilts and still return most of its money in a single calendar year, and the cash-flow analysis makes that concentration visible by totalling each year's income and redemptions side by side.
Several gilts, one heavy year
Holding a number of gilts is not the same as spreading their cash flows out. Three gilts can all mature in the same calendar year, and a portfolio built that way puts the return of every one of those principals into the same twelve months. The cash-flow analysis makes that visible: grouped by calendar year, it totals each holding's coupons and redemptions into one column per year, so a year that carries an outsized share of the portfolio stands out without any arithmetic by hand.
The point of the view is not that concentration is wrong. It is that a reader can see where the money returns, and decide whether that shape is the one intended. The number that matters is not how many gilts are held but how much of the portfolio's income and of its redemption falls in each year.
Two shapes, side by side
The table below sets two illustrative portfolios against each other. Each holds three gilts of £20,000 nominal, £60,000 in total, and each pays a coupon. In portfolio A all three gilts mature in 2028; in portfolio B they mature one each in 2028, 2031 and 2034. The figures are illustrative and not from any gilt or report — the coupons are round numbers chosen to show the shape, not a yield from the market.
| Calendar year | A income | A redemption | B income | B redemption |
| 2028 | £4,000 | £60,000 | £3,000 | £20,000 |
| 2031 | £0 | £0 | £3,000 | £20,000 |
| 2034 | £0 | £0 | £3,000 | £20,000 |
| Total | £4,000 | £60,000 | £9,000 | £60,000 |
Both portfolios return £60,000 of principal in total. Portfolio A returns all of it in 2028 and nothing after; portfolio B returns a third of it in each of three years and keeps paying a coupon throughout. On a calendar-year reading, A's 2028 column is the whole redemption; B's are three separate thirds. The same total, spread very differently through time.
Income and redemption concentrate differently
A coupon and a redemption behave in opposite ways when they bunch. A coupon is a regular payment, so the income columns fill in year after year for as long as a gilt is held; the figure used to size it is the income per £100 — the annual coupon paid on £100 of face value — multiplied by the nominal held. A redemption is a single event, so the capital column for a year is either the gilt's whole principal or nothing. That is why the two are shown separately: a portfolio can have steady income and still concentrate its redemptions, or the reverse.
Modified duration gives a rough sense of when a gilt's cash arrives. It is a weighted average of the time to each payment, in years, so a gilt with a longer modified duration spreads more of its value into the future and a shorter one returns it sooner. When the durations across a portfolio are all similar and short, the redemptions are likely to fall close together; when they are spread across long and short gilts, so are the cash flows that follow from them.
The income per £100 is the figure that turns a matching exercise into numbers. Dividing an income target by the income each £100 of a chosen gilt produces gives the nominal to hold; if every gilt chosen for the portfolio has a similar maturity, those nominals all come back in the same year. Reading the income per £100 down the gilt list while choosing, and then reading the calendar-year columns afterwards, is how the choice and its consequence can be compared.
Why a bunching redemption matters
A concentrated redemption year hands back a large sum on one date, and that sum then has to be put to work again at whatever terms the market offers at the time. A portfolio whose principal returns in dribs and drabs can reinvest in smaller amounts as it goes; one whose principal returns in a single year faces a single decision with the whole amount. The portfolio view shows the allocation of each holding, and the cash-flow analysis shows the year the redemptions land, so the two together describe the shape of the reinvestment ahead.
Concentration is a description of a shape, not a verdict on it. A large redemption in one year may suit a planned expenditure; what matters is that the year is seen in advance rather than discovered when the money arrives.
Reading the concentration rather than counting holdings
The instinct is to measure spreading by counting gilts: three holdings feel more spread than one. The calendar-year view is the check on that instinct, because it measures the cash, not the positions. A reader can look down the redemption columns and see whether one year takes a large share, and look across the income columns and see whether the coupons are steady or front-loaded. Neither reading requires the other to be wrong; they are two questions the same schedule answers.
Background, not advice
This explains how the calendar-year view shows where a portfolio's income and redemptions fall, and why a bunching year is worth seeing; it is general background, not investment, tax or legal advice for any reader's circumstances. Spread cash flows are not a guarantee of anything, and a concentrated year is not automatically a problem. The figures above are illustrative, and the cash-flow analysis for a real portfolio is projected from the trades booked in it, marked at the day's report.