with all the coverage of impending market crashes, what are you doing?

aroominyork

Alexland said:

aroominyork said:

But bear in mind that between February 2030 and February 2031, RPI will be move to being calculated using CPI including owner occupiers' housing costs (CPIH). Historical data suggests that will result in a c.0.9% lower return on ILGs. T29 is the last ILG to mature before the switch is made, althugh an ILG like TR31 maturing in August 2031 will mostly benefit from the current RPI methodology. 

With the shorter dated gilts the dirty market price is close to the current redemption value so you aren't getting rewarded for locking your money away and taking the volatility risk during ownership. When building a ladder there are various trade fees and market spread costs so it all becomes a bit less worthwhile.

Yes, the yield curve does its usual thing of rewarding longer maturities. If you don't want to build a ladder, iShares Up to 10 Years Index Linked Gilt Index is an option I am considering to provide some roughly drawn protection against inflation during retirement. 

Alexland

aroominyork said:

Yes, the yield curve does its usual thing of rewarding longer maturities. If you don't want to build a ladder, iShares Up to 10 Years Index Linked Gilt Index is an option I am considering to provide some roughly drawn protection against inflation during retirement. 

I am using INXG in my Fidelity SIPP where I can't directly own ILGs to cover the early years which is not ideal but good enough for now. I might eventually just move it to a money market fund. It would be good if a fund manager offered target date pure ILG funds similar to Vanguard VTR etc but maybe there isn't enough demand.

It's in my new AJ Bell SIPP that, once my workplace pension transfer from an ILG fund completes, I will be buying the longer dated average 2% ones to cover me from when I can access that SIPP so my assumption is that ladder will run from age 60 to 90 perhaps being traded in for a lifetime annuity in the final decade or so.

Of course if the prices rise and the yields reduce then it will be less attractive to hold and if by then there's a stock market crash I might give up on the whole idea and be back in 100% equities again!