Anybody looking at index-linked bonds?

hallmark

These have performed astronomically badly lately. Here's an example although all index-linked bond funds tell the same story: https://www.youinvest.co.uk/research/sub/FUND:3314452/charts-performance (set the chart to 10y to truly appreciate the recent falls).

As I've mentioned a couple times I'm dripping into various things.  These are currently next on the list.

Not a tip or a recommendation, these could presumably fall much further if the current unfavourable conditions continue.  But I'm aiming to buy some now and some more if they fall further.

Frequentlyhere

A 0.33% OCF is quite high for a fixed income product. You could also consider the Vanguard UK inflation linked fund for which fees are almost a third of the cost (0.12% OCF)

I note the Fidelity fund has fallen further from top to present day than the Vanguard fund (46% vs about 35%) - I can only assume it's longer duration.

I'm still absorbing the level of these drawdowns - losing half of your money in real terms in the 'defensive' part of one's portfolio. Wow.

edit: looking further into it, the average duration of Fidelity is 20 years vs Vanguard's 18. That explains some of the gap though perhaps not all. 

masonic

Extrapolate the trend line from the 2000s era, and you can see a decent reversion to the mean has now occurred. As you say, there is plenty of scope for further falls, but such a fund is not the 'return-free risk' proposition it was a year or two ago.

Personally, I'd prefer my inflation protection to come without extreme interest rate sensitivity, so would opt for short dated index linked gilts, which practically means buying them individually, since no good fund exists.

aroominyork

As an international rather than UK hedge against inflation, Royal London offers a short dated I/L fund. (A propos of absolutely nothing, I'm currently in Boston USA and in a restaurant last night the bill showed, before asking for a tip, an additional 3% for "Kitchen appreciation"!)

newatc

I bought some of the Vanguard Indexed liked fund, because I thought inflation was sure to rise, earlier this year but it was pointed by an IFA on this forum that it was not suitable for retail (non-expert) customers and based on his comment got out quite quickly (with small profit). I looked at the fund price just a few days and was shocked at it's fall. Lucky escape. So keeping away from such funds now even if the price is tempting!

Prism

I use Lyxor's 1-10 year index linked bond ETF. Comes hedged (down 7% this year) or unhedged (up 5%)