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...The US only launched inflation linkers in 1997, and floating-rate notes debuted as recently as 2013....
...These “linkers” may complement your gold holdings too....
...“Indeed, perhaps they responded rationally to the lack of value-creating companies listed on the London stock market and have been wise to focus instead on more promising global stocks, or even Index-Linkers...
...What’s the difference between standard gilts and linkers?...
...Linkers have been particularly expensive in recent years because they track the flawed retail price index, which has consistently run at least 1 percentage point higher than the consumer price index....
...“Linkers” account for a quarter of the UK’s debt. Rampant inflation is set to push this year’s interest costs to the highest levels in the developed world....
...In your recent article (“Inflation-proof gilts: is it time to buy ‘linkers’?”, FT Money, November 25) suggesting that it may be time to invest in index-linked gilts, Interactive Investor is cited....
...Notably, this holds even without assuming a lower structural demand for long-maturity Gilts due to the ongoing deleveraging of LDI strategies, but does not incorporate any conclusions on the optimal mix of linker...
...The red dots show the cumulative interest that would be payable in cash terms on a 3 per cent coupon six-year linker....
...Further reading:A shock looms for governments over inflation-linked bonds (FT)Linkers in a cold climate — FTAV (2010)...
...The Bank’s staff estimate that this would by equivalent to the moves seen in the linker market in Q422 and equate to a 1-in-100 year 5-day event....
...That is about 1 per cent on 10-year linkers today....
...Linkers come back to bite?...
...A: UK linker, Austria’s century bond, Argentina’s century bond....
...With 30yr ASW hitting her forecast in the opening days of the year, Russell reckoned in a piece last week that: the significant cheapening of gilts and linkers versus swaps may have led some insurers to...
Only Built 4 Curbing Linkers
...Linkers are far less liquid than the conventional gilt market, which means unusually large movements (for the rates market) can happen....
...As a result, it expects the UK consumer price index to rapidly revert to mean levels after 2023, reducing interest costs on linkers....
...“Linkers are stinkers”, says the Lex column of inflation-linked bonds and the headache they are now causing governments, while The Wall Street Journal calculates there is $3.5tn of debt around the world...
...Value-recovery instruments like GDP-linkers should be compensation for real debt relief, not a sweetener on top of an already too sweet deal....
...At pixel time the UK “linker” maturing in 2073 — aside from a handful of perpetuals, the longest maturity UK government bond in the market — has lost 78.6 per cent of its value since being issued on Nov...
...This increase was entirely due to the rise in semi-annual linker payments connected to a surging retail price index (which includes mortgage rates)....
...In price terms, the 10-year linker fell 5.5 per cent; developed world sovereign bonds are not supposed to move like that (the 30-year linker was down 16 per cent on the day)....
...In the UK, meanwhile, so-called “linker” funds had attracted almost half a billion pounds of additional net assets through 2021, reckons Morningstar....
...One way to mitigate this effect is to invest in much shorter dated linkers. 4. Boo!...
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