Fund Objective

The objective of the fund is to provide an attractive rate of return through investment primarily in UK index-linked fixed income securities.

View on Past Performance

The fund outperformed the benchmark index in September, as the portfolio is marginally underinvested in gilts as yields rose. The portfolio is marginally underinvested in index-linked gilts due to low real yields. As the portfolio follows a relatively passive strategy, activity remains low and reflects flows in the fund. On 30 September, the real yield on the 5-15 year index linked gilt was 1.29% at an implied inflation rate of 5% and 1.51% at an implied inflation rate of 0%.The yield on ten-year nominal gilts was 4.4490%. The yield on ten-year index linked gilts was 1.389%. This implied a breakeven inflation rate of around 3.060%. Actual retail price inflation in the UK for the 12 months ending 31 August was 4.80%, while 12-month growth in the RPIX (RPI less mortgage interest rate payments) was 5.20%.

Fund Details