Inflation-linked bonds – lock in a real yield

Inflation-linked bonds look more compelling than they have done for many years, especially in the US

Government bonds
(Image credit: Getty Images)

I recently said that even though conventional bond yields have risen a long way from their lows, we’re not yet tempted by them for our asset-allocation portfolio, except perhaps very short-dated bonds. 

We’re not forecasting that rates are going much higher in the short term (we forecast as little as possible), but it seems clear that yields don’t offer much compensation for the risk that they do. They seem pretty much at the lower end of where you’d expect them to be. 

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Cris Sholto Heaton

Cris Sholto Heaton is an investment analyst and writer who has been contributing to MoneyWeek since 2006 and was managing editor of the magazine between 2016 and 2018. He is especially interested in international investing, believing many investors still focus too much on their home markets and that it pays to take advantage of all the opportunities the world offers. He often writes about Asian equities, international income and global asset allocation.

Cris began his career in financial services consultancy at PwC and Lane Clark & Peacock, before an abrupt change of direction into oil, gas and energy at Petroleum Economist and Platts and subsequently into investment research and writing. In addition to his articles for MoneyWeek, he also works with a number of asset managers, consultancies and financial information providers.

He holds the Chartered Financial Analyst designation and the Investment Management Certificate, as well as degrees in finance and mathematics. He has also studied acting, film-making and photography, and strongly suspects that an awareness of what makes a compelling story is just as important for understanding markets as any amount of qualifications.