We explain the mechanics of inflation protection and how to identify relative value opportunities.
A notable theme over the past few years has been the dramatic flattening of breakeven inflation curves.
We discuss the surge in performance of UK inflation linked bonds and the benefit to Australian investors.
Two charts we are watching closely and what they mean to us and investors.
Our view on the volatility since the Election result, however overall these events are favourable for markets and good for investors.
Increasing issuance of inflation linked bonds in New Zealand has resulted in a NZD 14 billion market, accounting for close to 20% of the NZ government bond market. NZ ILBs offer an attractive real yield and a low entry point for breakeven inflation.
Following recent upside surprises in inflation, and the move to a neutral stance by the Reserve Bank of Australia (RBA), we highlight the likely implications for returns on nominal and inflation protected fixed income portfolios.