index-linked bond

Other investments include Treasury issues, index-linked bonds and corporate notes.

The UK has issued around 20 index-linked bonds since then.

The money price of index-linked bonds varies due to the influence of two separate forces.

The UK was one of the first developed economies to issue index-linked bonds in 1981.

Index-linked bonds are more convex than conventional bonds.

The company took the step off offering index-linked bonds to UK investors recently - and the take-up of the offer was impressive.

The broker continues to see regulated utlities as cheap index-linked bond proxies and an inflation hedge.

William Stanley Jevons later found Lowe's pioneer work on index-linked bonds "ingenious".

If the expected rate of inflation is higher than the break-even rate of inflation, investors will prefer the index-linked bond.

So far, we have considered bonds with coupons that are fixed in nominal terms (conventional bonds) or real terms (index-linked bonds).

Calculated gross redemption yields (real) on index-linked bonds vary just as do yields (in nominal terms) on conventional bonds.

The snag is that in countries with persistently high inflation hardly anyone holds paper money; instead they put all earnings in index-linked bonds or interest-earning savings accounts.

The news that National Savings & Investments is withdrawing index-linked bonds, also makes it harder to find a home for cash that can match the growth in prices.

As with all index-linked bonds, there is a time lag between the collection of prices data, the publication of the inflation index and the indexation of the bond.

Since 1981, the Bank of England has issued a number of index-linked bonds where both capital sum and interest payments are increased in line with changes in the retail price index (RPI).

The theory is that we can choose a portfolio of assets (fixed interest bonds, zero coupon bonds, index-linked bonds, etc.) whose cashflows are identical to the magnitude and the timing of the cashflows to be valued.

I don't expect to be cashing in my NS&I index-linked savings any time soon and I don't expect the Bank to be shifting its pension fund out of index-linked bonds any time soon either.

Savers and investors are continuing to struggle to maintain the value of their cash, a task made harder by the Bank of England again holding interest rates at 0.5 per cent and National Savings & Investment cancelling the sale of its index-linked bonds.