lategenexer help please

watt66

Hello,
I am using the helpful lategenexer gilt ladder builder, but unsure of the cashflow predictions. When predicting index linked values, it shows that the future withdrawals are are all the same amount, do I assume that as future RPI is unknown, the actual values should increase with the index linked redemptions, or has this been accounted for and the values shown represent an assumed % increase of RPI?

MK62

There is an info box on the cashflow page which states that the withdrawals are shown in today's money......ie, discounted by inflation. As there is no way to know what inflation will be over future years, then there is no way to accurately predict the actual withdrawal amount, so what it shows is the equivalent in today's money.

The often quoted key phrase is that with conventional gilts you know the amount of any future withdrawal but not the value, and with index linked gilts, you know the value of any future withdrawal, but not the amount.