I'm trying to set up a the bond part of a GBP based permanent portfolio. I've found good long maturity bond. I'm trying to set a bond ladder for the short term parts.
Does anyone know the criteria for choosing gilts for a ladder? Do you even need to ladder, or can you just buy a bunch of 5 year bonds?
There's a list of candidate bonds here
http://gyroscopicinvesting.com/forum/ht ... 0#msg59390
Buying UK Gilts
Moderator: Global Moderator
Re: Buying UK Gilts
As far as criteria go, UK Government issued was the only thing that seemed important to me. I just chose UK government bonds with maturity dates at around the same time of year to form the ladder. I've actually done a 3 year ladder, but same difference.
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MachineGhost
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Re: Buying UK Gilts
You do need to ladder the ST to protect against rising inflation expections. If all you did was own 5-year Gilts, you would get whacked.
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Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Re: Buying UK Gilts
Nope you don't *have to* ladder, but you're holding these bonds as cash equivalents so you'd need to hold the short dated ones e.g. with a maturity of about a year or less. Anything greater than that and as MG says you run the risk of getting "whacked" by rising interest / inflation rates. The ladder is a compromise that smooths rate changes.kev_in_tw wrote: Do you even need to ladder, or can you just buy a bunch of 5 year bonds?