Bond index fund vs savings account

joeNZ

masonic said:

joeNZ said:

I definitely feel uncomfortable all-in with equities so I'm looking for a balancing asset and all I can come up with is cash. The rebalancing to bonds that I plan to do if rates increase would come from the cash pool in the first 3 years (unlikely I know), after that equities would be converted. 
The real trouble is finding a reasonable asset not correlated with equities - I can obviously diversify the equity pool as far as possible but there's still plenty correlation in there. Also I have a firmish end date of 10 years where I'm likely to need to cash up much of the portfolio so I can't just wait it out. In fact, if bonds don't normalise, I might have to start a slow process of cashing up from year 7.

Have you considered capital preservation investment trusts such as CGT, PNL and RICA (a couple of those have OEIC equivalents if that is your preference)? These don't eschew bonds entirely, but hold a mix of assets that has tended to hold up quite well during market turbulence and may serve as a second line of defence after cash.

I've been trying to avoid fees but I'll have a look at these. It may be worth pushing some cash into something designed to fix my problem. Thanks.