FSA tweaks rules to preserve index-linked gilt funds

The FSA is altering regulations on fund income to guarantee a future for the UK Index-Linked Gilt se...

The FSA is altering regulations on fund income to guarantee a future for the UK Index-Linked Gilt sector. Under accounting changes made last year, money put aside for indexation purposes would have to be paid out as income. This would have prevented funds providing a hedge against inflation on investors' holdings. There are currently 12 funds in the UK Index-Linked Gilt sector, with seven over £100m in size. The FSA said that while the number of affected funds is small, investors would likely have bought the vehicles to retain the original buying power of their capital. It has the...