"Bonds in a bubble" - What does that mean?

A_Flock_Of_Sheep

gadgetmind wrote: »

Yes and maybe.

Inflation linked gilts are currently priced with a negative real return to maturity. This means that buying them means you'll lose some of your future purchasing power as the price for retaining the rest of it.

Personally I hold corporate bond ETFs (a mix of SLXX and ISXF as I hold a lot of bank paper elsewhere), a couple of strategic bond funds (that mainly hold linkers and are short on fixed), and the aforementioned bank paper, which is some directly held preference shares and a fund that specialises in financial capital.

Buying this fund was *most* unlike me, but it's played out exactly as I predicted. Shame I didn't have more confidence!

SLXX is something I have considered for my new more balanced portfolio.

gadgetmind

A_Flock_Of_Sheep wrote: »

SLXX is something I have considered for my new more balanced portfolio.

I've been happy holding it for a couple of years, but the dividend sttream is dropping as bonds mature and new bonds are bought with lower yields.

If you're interested, the strategic bond funds I hold are mainly Old Mutual Global Strategic Bond (have held for years in various pots) and Kames Strategic Bond.

Try comparing the ACC versions of both on somewhere like hl.co.uk

Look at the last year, Wow, that Kames one is great! Look over three years. Hmmm. Now look over five years.

I like Old Mutual as they are rarely top quartile but they are in the middle of the pack enough to beat the more volatile funds.

Isn't this what you want from a bond fund?

I also hold some infrastructure funds to produce income and reduce volatility. This is mostly HICL but also BBGI, JLIF and INPP. As with bonds, they are now all on premiums but they should handle future inflation fairly well.

sabretoothtigger

Any bond promising sterling is flawed to me. Sterling cash notes are a bond, so its an anchor with its end tied to itself how secure can that be

I hope to hold the currency of those we trade with which should be in demand in future.


Our Gov holds big amounts of USA debt as we trade large amounts with them, problem is USA mostly imports as do we. All their importers hold many dollars, the market is saturated
I dont hold any sterling bond as by proxy we all hold many via gov and ditto dollars, etc

A_Flock_Of_Sheep

gadgetmind wrote: »

I've been happy holding it for a couple of years, but the dividend sttream is dropping as bonds mature and new bonds are bought with lower yields.

If you're interested, the strategic bond funds I hold are mainly Old Mutual Global Strategic Bond (have held for years in various pots) and Kames Strategic Bond.

Try comparing the ACC versions of both on somewhere like hl.co.uk

Look at the last year, Wow, that Kames one is great! Look over three years. Hmmm. Now look over five years.

I like Old Mutual as they are rarely top quartile but they are in the middle of the pack enough to beat the more volatile funds.

Isn't this what you want from a bond fund?

I also hold some infrastructure funds to produce income and reduce volatility. This is mostly HICL but also BBGI, JLIF and INPP. As with bonds, they are now all on premiums but they should handle future inflation fairly well.

I have been compiling my portfolio recipe and have looked at HICL but also INFR

At the moment I just have Equity Income Funds and today I have been pound cost averaging. The market has dropped and I did a deal this morning to buy some more units of IPHI and Threadneedle UK Equity Income. Thebwaybthe FTSE has gone today I am pretty sure these funds have dropped today. These are the only funds I hold at the moment. I cashed in Marlborough Multi Cap and Newton Asian and Turkey HSBC. Also Japan where my hooves got a bit scorched when the Nikkei dropped 7.3%.

Now I'm going to be less renegade.

gadgetmind

A_Flock_Of_Sheep wrote: »

I have been compiling my portfolio recipe and have looked at HICL but also INFR

HICL and chums are more institutional PFI etc. infrastructure (though not exclusively) that's directly held whereas INFR is global and covers a wide range of infrastructure assets that are listed.

As it happens, for mostly inertia reasons, I hold a lot of First State Global Listed Infrastructure even in a portfolio that is now (mostly) passive.

A_Flock_Of_Sheep

Just had my purchase confirm for IP HI down nearly 10p per unit so I got more units for my money today. So is this pound cost averaging? It's actually put the value of my holding up in price by a fair bit by buying low??? How is that?

Thanks for sharing some of your portfolio gadgetmind I find it interesting to see what other people have and their goals. What is your goal for yours? You may know mine is income and growth.

gadgetmind

A_Flock_Of_Sheep wrote: »

It's actually put the value of my holding up in price by a fair bit by buying low??? How is that?

What price did you buy at before and what just now?

What is your goal for yours? You may know mine is income and growth.

1) Our unwrapped holdings are to provide a tax-efficient income stream for my wife, which is mainly dividends.
2) Everything else is to provide income starting five years hence, but for the wrapped holdings, I care little whether this comes from growth or income. I therefore hold a portfolio that's roughly 80% equities with the 20% being bonds, property, and others as discussed above.

Ark_Welder

IronWolf wrote: »

Money market funds are the ultimate example of this, but they only invest in government bonds with very short maturities

Not strictly true: money market funds will usually hold cash and certificates of deposit as well as short-maturity corporates and gilts, but more towards the cash and near-cash end of the scale than bonds. This is why there are very few money market funds that can be held in an S&S ISA, if any at all.

Compare with funds that do specifically hold short duration bonds, such as those from AXA and M&G, which can be held in an ISA. (The M&G fund used to be in the IMA Money Market sector until the end of 2011 (as M&G High Interest), after which it moved to Sterling Corporate to reflect the level of non-cash or near-cash assets being held.

A_Flock_Of_Sheep

gadgetmind wrote: »

What price did you buy at before and what just now?

I first paid 640p for IPHI - Today's price which has fallen from yesterday is 674p. Yesterday the price was 683p

gadgetmind

A_Flock_Of_Sheep wrote: »

I first paid 640p for IPHI - Today's price which has fallen from yesterday is 674p.

You paid a higher price than when you first bought so your average buying price is higher. Mathematically this is the only way it can be.