Is it time to get some bonds?

fizio

OldScientist, 
I am not yet at state pension but am in your category 1-2 anyway as I have some BTL on side. I am thinking similar to you in going around 25% bonds and preferring to reduce volatility and legacy is low on my list of priorities.
Can I ask if you are in ny particular kinds of bonds as I have been reading about bond ladders and short term gilts etc (though the reasons for these seem not very relevant for me)

OldScientist

fizio said:

OldScientist, 
I am not yet at state pension but am in your category 1-2 anyway as I have some BTL on side. I am thinking similar to you in going around 25% bonds and preferring to reduce volatility and legacy is low on my list of priorities.
Can I ask if you are in ny particular kinds of bonds as I have been reading about bond ladders and short term gilts etc (though the reasons for these seem not very relevant for me)

I use three sets of fixed income
1) 2x one year fixed rate savings accounts set to mature 6 months apart (which is how often we withdraw from the portfolio).
2) Global short bond fund
3) Global bond fund

We set the average maturity to lie between 1 and 2 years (i.e., at the short end of things) since the idea is to reduce volatility.

The savings accounts satisfy my OH's preference for cash, but, excluding tax effects, also tend to give a better rate than the equivalent gilt (I guess the challenger banks are tapping into commercial loan rates).

The global bonds are there because it is likely that my DB pension is largely invested in gilts, and (when it arrives) the SP is also strongly UK based, so I wanted some fixed income that provides some international diversification. The two funds we use include corporate bonds as well as government bonds (to some extent because there isn't a choice on one platform) which I am fairly happy with, although alternative funds exist that consist solely of government bonds.

For a more niche reason, we have a short inflation linked gilt ladder to cover the back end of the period before my OH gets their SP (this is to provide some inflation protection to the, nominal, life insurance payout in case I die early since the DB income will then halve).