Low risk funds/ideas for cash lump sum

aroominyork

Understood (mostly) and bookmarked. Without wanting to be a broken record, is it right that if I sold T29 I would receive the benefit of risen forward inflation, albeit with the cash amount partly offset by rising yields? Basically I am asking whether, if inflation to 2029 is as currently expected/implied, it would be a stupid time to sell?

masonic

If you sold now, you'd get the benefit of index linking for actual inflation up to the end of last year, due to the 3 month lag. So indexation would use the Dec-Jan adjusted RPI of around 406.6, rather than the latest 408.2 figure for February or whatever March turns out to be. If you switched into TG29, that might be a good move or a bad move depending on what inflation actually turns out to be over the next few years. If you think RPI will be less than 4.2%, then fixing a nominal return would be attractive, whereas if you want to insure against it being higher than that, it would not.

Albermarle

The Morningstar economist is a dissenting voice when it comes to inflation and interest rate movements.

Predicting a drop in BoE rate by year end.

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