Retail price index changes could hit 'complacent' index-linked gilt investors

Overhaul impact on 'linkers' to be assessed

David Brenchley
clock • 4 min read

Prices of long-dated index-linked gilts could see another steep fall as investor complacency sets in, but an allocation to the asset class could still benefit multi-asset portfolio managers, according to industry experts.

The UK index-linked gilts sector was the best-performing Investment Association (IA) sector in the 12 months to 31 August, with the average fund returning 19.99% as interest rate expectations began to decline. However, gains reversed when changes to the retail price index (RPI) methodology were announced on 4 September. UK inflation slips to 32-month low In the month of September, so-called linkers were the worst-performing IA sector, losing an average of 1.75%. The overhaul, expected to happen between 2025 and 2030, will bring the measure in line with the consumer price index, ...

To continue reading this article...

Join Investment Week for free

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

More on UK

Trustpilot