Commercial property is 'novel' liability solution

Legal & General group advises against index-linked gilts as a hedge against inflation preferring commercial property as an asset class

Investors should look to commercial property instead of index-linked gilts as a hedge against inflation, says Legal & General Investment Management. In the group's latest Fundamentals briefing, head of property research Robin Martin says medium-term index-linked gilts represent a high cost of insuring against possible inflation risks, considering their 1% to 1.25% real yield. He points to a recent report from the EDHEC Business School which claims 'novel' liability matching solutions, including commercial property and commodities, could deliver the same degree of inflation-hedging for ...