An Investor’s Guide to Inflation-Linked Bonds

An investor’s guide to inflation-linked bonds 1

An Investor’s Guide to Inflation-Linked Bonds

This document is intended for investment professionals in the Asia-Pacific region.

2 An investor’s guide to inflation-linked bonds

Standard Life Investments is a premier asset manager with an expanding global reach. Our wide range of investment solutions is backed by our distinctive Focus on Change investment philosophy, disciplined risk management and shared commitment to a culture of investment excellence.

Contents

1 About Standard Life Investments

2 Diverging Inflation Paths Create Opportunities

4 Some Key Concepts

5 Who Issues Inflation-Linked Bonds?

6 Who Invests in Inflation-Linked Bonds?

7 The Benefits of Inflation-Linked Investing

8 A Wide Opportunity Set

10 Managing Currency Risk in a Global Portfolio

11 A Brief History of Inflation-Linked Markets

13 The Role of Inflation Swaps

14 Key Global Inflation Indices

15 Looking Ahead

16 Contact Details


Standard Life Investments is a premier asset manager with an expanding global reach. Our wide range of investment solutions is backed by our distinctive Focus on Change investment philosophy, disciplined risk management and shared commitment to a culture of investment excellence.

About Standard Life Investments

As active managers, we place significant

emphasis on rigorous research and a strong

collaborative ethos. We constantly think

ahead and strive to anticipate change before it

happens, ensuring that our clients can look to

the future with confidence.

As at 31 December 2010, Standard Life

Investments managed $245.6 billion on

behalf of clients worldwide. Our investment

capabilities span equities, fixed income, real

estate, private equity, multi-asset solutions,

fund-of-funds and absolute return strategies.

Headquartered in Edinburgh, Standard Life

Investments employs more than 850 talented

professionals. We maintain offices in a number

of locations around the world including Boston,

Hong Kong, London, Beijing, Montreal, Sydney,

Dublin, Paris and Seoul. In addition, we have close

relationships with leading domestic players in

Asia, including HDFC Asset Management in India

and Chuo Mitsui Asset Trust and Banking in Japan.

Our parent, Standard Life plc, was established

in 1825. A leading provider of long-term savings

and investments, Standard Life floated on

the London Stock Exchange in 2006 and is

now a FTSE 100-listed company. Standard

Life Investments was launched as a separate

company in 1998 and has quickly established

a reputation for innovation in pursuit of our

clients’ investment objectives.

Our investors rank among some of the

world’s most sophisticated and high-profile

institutions. They include corporate pension

plans, banks, mutual funds, insurance

companies, fund-of-fund managers,

endowments, foundations, charities, official

institutions, sovereign wealth funds and

government authorities.


Diverging Inflation Paths Create Opportunities

Inflation is diverging

In the 1990s-2000s, now known as the Great

Moderation, a noticeable feature of the

economic landscape was that inflation was

low across most countries despite consistently

strong economic growth. In recent years,

the inflation path has looked rather different

from one economy to another. Compare, for

example, the US and the UK. The UK’s inflation

data has stubbornly exceeded expectations

ever since the crisis, whereas in the US core

inflation has tracked obdurately lower. Policy

makers in both countries allege the existence of

large output gaps, yet only the US displays the

classic symptoms. In the UK, unemployment

may be high, but it is not at levels implied by

output gap estimates. Inflation is stubbornly

higher than it should be, even when all of the

temporary factors such as tax increases and

the impact of a lower currency are removed,

and even when capacity utilisation indicators

are largely around cyclical averages rather than

at peak levels.

Similarly for Europe, there is a marked

heterogeneity of economic performance. Core

Europe has recovered well from the crisis, led

by Germany where some wage pressures are

starting to appear. Conversely, the plight of the

peripheral EMU countries needs little further

description. The dilemma for the ECB in terms

of policy making is plain to see. Indeed, with

the Fed still easing quantitatively, the Bank

of England split on the timing of a tightening

and the ECB chairman making it abundantly

clear that action is coming soon, this creates a

further degree of difference.

While such divergence may complicate

matters for policy makers, it does throw up

opportunities for investors to add value in

bond portfolios.

Having emerged from a period where the world

generally thought inflation was tamed, through

one where deflation was seen as much more

of a threat, the upswing in inflation pressures,

partly in the US and Europe but especially

across many emerging market economies, has

brought inflation-linked bonds to the forefront

of many investment discussions.

In recent months, inflation expectations have

risen markedly across major markets. This

move has been highly correlated with the

changes in the price of oil and other major

commodities. However inflation expectations

over the coming five years are only at

comparable levels to those experienced prior

to the crisis. In that period, the consensus was

that the authorities had inflation under control,

permanently. Questions have to be asked

therefore about why inflation insurance is no

more expensive now than then, given the much

higher existing levels of uncertainty.

At this stage of the economic cycle, we would

expect in normal circumstances that investors

should favour real assets, i.e. those with an

implicit or explicit link to inflation. However,

this is far from a normal recovery, after a far

from normal recession. Hence, it is expected

that investors will wish to own a more cautious

mix of real assets than in more normal

circumstances. This may mean a greater weight

in inflation-linked bonds, and lower weightings

in riskier real assets than would be normal at

this stage of the cycle, to provide a significantly

better diversified portfolio. Global inflation-

linked debt has proved a powerful diversifier in

the last decade, both within bond portfolios

and within balanced funds. Holdings in this

asset class allow investors to move closer to

their efficient frontier.

With the shockwaves of the financial crisis still rumbling around the markets, a growing theme is the divergence of inflation prospects across different economies. Before the crisis, the degree of homogeneity of outlook was remarkable; now, the opposite is the case.

Jonathan Gibbs, Head of Real Returns


As the inflation performance of different

economies has diverged in recent times, so

has the policy response. The US still has its

foot firmly on the stimulus gas, while the UK

has started stringent fiscal restraint. In the

Euro-zone, the ECB remains unreconstructedly

monetarist, and the fiscal picture is as varied

across the Euro-zone as is the economic

performance. We believe this divergence of

both performance and policy response will

generate opportunities.

A key example of this is the performance of

Australia, where the economy has benefited

from heavy exposure to emerging economies

such as China and India. Australian real yields

are much higher than the major markets, and

we have benefited from this several times

in our global inflation portfolios. Australian

bonds have underperformed US ones in recent

months and we believe there is an opportunity

to see this reverse over time as the Australian

economy cools.

In conclusion, the divergence of economic

performance and policy response can be exploited

by managers of global funds to add value. We

seek opportunities in both cash and derivative

markets. Global inflation portfolios can form a

key part of a wider multi-asset portfolio, providing

substantial diversification of risk.

Basis points spread between Australian and US real yields

Source: Bloomberg as at 31 May 2011.

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Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

2010 2011


Some Key Concepts

The features of an inflation-linked bond

An inflation-linked bond is similar to a nominal

bond such as a Treasury bond. The only difference

is that both its principal (the final payment at

maturity) and its coupon (the interest rate paid

during the life of the bond) are linked to an

inflation index. This means that the investor

receives the real face value of the bond at

maturity, and the real value of the interest rate

in the meantime.

Real yields

Instead of focusing on nominal yields, investors

in inflation-linked bonds are interested in real yields, which measure a bond’s yield adjusted

for inflation. This measure is important because

inflation erodes the real value of investment

returns on nominal bonds, and consequently

reduces an investor’s spending power in the

future. It is also important to investors whose

liabilities are impacted by inflation, as investors

will seek to retain real spending power for

the future.

In fundamental economic terms, real yields can

be interpreted as the price of economic capital

– for example, the price that businesses have

to pay to invest in new plant and machinery. In

boom times, this price rises with the demand

for that capital, and therefore so do real yields.

Conversely, in times of weakness, real yields

fall as demand for capital falls.

Nominal yieldsThe yield on a nominal bond yield can be

deconstructed using what is known as the

Fisher equation. This breaks down nominal

For example, if the annual coupon of a

nominal bond was 5% and the underlying

principal of this bond was $100, the annual

coupon payment would be $5. In the case

of an inflation-linked bond, if the inflation

index increased by 75% over the life of

the bond, the principal of the bond would

increase to $100 x 175% = $175. The

nominal coupon rate would rise in line with

the price index over the life of the bond, and

in this instance would be 8.75% (but still 5%

in real terms) at maturity

n = r + i

Where:

n = yield on a nominal bond

r = real yield on an IL bond

of the same term maturity

i = inflation expectations

yields into three components: inflation

expectations, a required real yield that

investors demand over and above those

inflation expectations, and a ‘risk premium’.

This last factor, which represents the price

investors are prepared to pay for a guaranteed

real return, is notoriously difficult to calculate,

and many an academic has failed to quantify

it. For this reason, the market convention

is to include risk premium within inflation

expectations, resulting in the following

simplified formula:

This equation results in one of the most

important concepts for investors. The inflation

expectations element of the formula represents

the expected average level of growth in the

price level over the life of a nominal bond and

an inflation-linked bond of similar maturities. By

extension, if the market is correct about these

expectations, then in order for the equation to

remain in equilibrium, the overall returns on the

two bonds must be identical. This is known as

the breakeven rate. If inflation is higher than

what is priced in over the life of the bonds, the

inflation-linked bond will give a higher return; if

lower, the nominal bond will perform better.

So investors who wish to take a view on the

path of inflation have a choice. If they believe

that inflation will be higher than the level priced

in by the market, they will sell nominal bonds

and buy inflation-linked. If lower, they will do

the opposite. If of course the market is right,

the investors will breakeven.

However, this is not just a hold-to-maturity

strategy, as a breakeven rate priced by

the market represents the expected average

rate of inflation over the life of the bonds.

Inflation expectations vary with economic

conditions, and so by varying the weightings

of nominal and inflation-linked bonds in

the portfolio, investors can take views on

movements in those expectations.


Who Issues Inflation-Linked Bonds?

The primary issuers of inflation-linked bonds

are governments. All of the G7 governments,

and many others, now use the asset class as

part of their borrowing program. The reasons

behind this are manifold, but it is done at

least in part to cheapen the cost of funding.

Governments expect to ‘save’ the risk premium,

by guaranteeing investors a real return.

Investors are willing to pay more for this surety.

Issuing inflation-linked bonds can be shown

to smooth the cashflows of a government.

A good deal of governments’ incomes are at

least partly inflation-linked. Sales and value

added taxes along with excise duties are prime

examples. By matching the mix of income

and payments, a government can reduce

the volatility of its cashflows, and in theory

at least, needs to adjust its tax rates less

frequently.

Inflation-linked bonds provide informational

advantages to governments and central banks

by demonstrating a market-driven, observable,

measure of inflation expectations. On occasion,

this can be distorted by institutional factors,

but implied inflation expectations are a useful

tool for policy makers.

In some instances, issuing in inflation-linked

space has been used as a demonstration of

a government’s inflation fighting credentials.

For example, the UK launched its inflation-

linked market in the early 1980s at a time of

high inflation, and by taking on the inflation

risk of its debt, it was demonstrating its

determination to bring inflation under control.

Many governments, for example some in South

America, have found that when their inflation

rates were persistently high, inflation-linked

bonds were the only bonds that investors

would buy.

Issuance of inflation-linked bonds can also

be seen as a means of reaching out to the

widest range of investors possible, while also

diversifying the risk of a government. In many

ways, a government can be seen as a fund

manager with the assets and liabilities column

headings swapped over. Diversifying assets is

every bit as important as diversifying liabilities.

Non-government issuers are fairly rare outside

the UK, and are dominated by semi-government

and agency issuers such as KfW, EIB and New

South Wales Treasury Corporation. In the UK,

a number of utility companies, whose pricing

structures are statutorily linked to the Retail

Price Index, have issued inflation-linked bonds.

There are also a number of Private Finance

Initiative bonds (PFI is a scheme to encourage

government sponsored infrastructure spend

without affecting the government’s balance

sheet), which were used to finance the building

of schools and hospitals, and similarly had

inflation-linked cashflows. Outside the UK,

inflation markets are almost exclusively

government and semi-government issued.


Who Invests in Inflation-Linked Bonds?

Typical investor profile

Inflation-linked bonds appeal to a wide and

growing range of investors. Clearly, the ability

to match inflation-linked liabilities is the prime

reason to invest. If investors’ real liabilities are

concrete, the only way to guarantee a cashflow

in real terms at that point is to buy an inflation-

linked bond that matures at the same time as

the liability. Plenty of other real assets exist,

such as equities, property and commodities,

but they do not constitute an inflation hedge.

They are far more volatile than the price level,

and may actually deliver a loss in real terms at

the appointed time. A mixture of real assets

will usually be a more efficient portfolio than a

single asset, and inflation-linked bonds tend to

be poorly correlated with riskier real assets, so

there is considerable diversification advantage

to be had from adding inflation-linked bonds to

the portfolio.

Investors with a portfolio of fixed real terms

liabilities may buy a matching portfolio of

inflation-linked bonds. The portfolio can be

designed to closely match the liability profile.

Many more investors however opt for a less

rigid match, but look at the appropriateness

of the mix of their assets relative to liabilities.

This tends to result in investments in actively

managed, benchmark-driven portfolios of

inflation-linked bonds.

The most prominent among these investors

are pension funds. They, by definition, have

an extensive book of real liabilities, which

they must meet at the appropriate time. An

immature pension fund, where most of the

liabilities are a long way in the future, can

afford to take a riskier view, holding a more

volatile range of real assets. As the fund

matures, the risk appetite of the

fund falls, and the need for closer liability

matching grows. This applies both to an

individual’s pension investment fund, and to

company or institutional wholesale funds. So

as a fund matures, weightings in equities and

property tend to fall at the expense of inflation-

linked exposure.

Charities, endowments and foundations are

also major investors in inflation-linked assets,

looking to preserve capital without undue

volatility. These investors also frequently have

inflation-linked payment schedules to their

beneficiaries, which makes inflation-linked

investments all the more suitable.


The Benefits of Inflation-Linked Investing

In addition to the liability matching benefits

we have just discussed, inflation-linked

bonds play a much wider role in both the bond

portfolio, and the total portfolio of assets.

Bondholders who expect inflation expectations

to rise should increase their holdings of

inflation-linked bonds, as these will outperform

nominal bonds if this occurs. Inflation-linked

bonds are also less volatile than nominal

bonds, as they respond to movements in real

yields, not nominal yields. This results in a

smoothing of returns to investors. Further, if

investors perceive that nominal yields are too

low, holdings of inflation-linked bonds will give

some measure of downside protection.

More importantly though, inflation-linked

portfolios, and particularly global ones, offer

significant levels of diversification within the bond

portfolio, as they have a relatively low correlation

with other bond asset classes. Within the wider

portfolio, those correlations are even lower,

meaning that a global inflation-linked portfolio is

an excellent diversifier, improving risk and return

characteristics of the overall portfolio and pushing

the investor closer to his or her efficient frontier.


A Wide Opportunity Set

While the US remains the largest issuer of

inflation-linked bonds, investing in global

inflation-linked bonds offers a broader

opportunity set than domestic portfolios, in

addition to giving access to the global liquidity

pool. The global market extends maturities

available for US investors from 30 to 45 years.

The chart below is a distribution by size and

maturity of bonds in the Barclays Global

Inflation-Linked Index, showing the depth of the

opportunity set available. Liquidity is generally

good across the major inflation-linked issuers.

Access to derivatives, while not required, widens

the opportunity set yet further.

In addition to the reduction in risk brought about

by reducing exposure to unexpected changes

in price levels by investing in an inflation-linked

portfolio, moving from a domestic portfolio to

a global portfolio reduces the risk yet further

as no one country will determine the success

or failure of your investment portfolio. The

expanded opportunity set also offers a broader

opportunity set than a purely domestic portfolio.

Barclays Global Inflation-Linked Index

Mar

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Valu

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bill

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Source: Bloomberg as at 31 March 2011.

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UK US Euro-zone Canada Australia Sweden Japan


Reducing risks

The chart below suggests very strongly that a portfolio of hedged global inflation-linked bonds

is much more efficient than a simple domestic one, displaying significantly better risk-return

characteristics. Similar results are generated against other bond asset classes, and even greater

diversification benefits are shown against asset classes in the wider portfolio.

Active Versus Passive Investment

We believe that the inflation-linked bond

markets are inefficient, and this creates an

opportunity for active investment managers to

outperform those that adopt a passive strategy.

Because inflation-linked bonds represent a

relatively small proportion of the global bond

market, there is relatively limited research

undertaken. Markets are localised, and different

markets are affected by different drivers.

Adopting a passive strategy commits investors

to abide by whatever the rules of the passive

benchmark are, however bad. For example,

an issuing country may underperform very

substantially before being ejected from a

benchmark index, damaging returns to passive

investors. Active investors can anticipate such

changes and create outperformance. This was

the case when Greek inflation-linked bonds

were ejected from the benchmark indices at

the end of 2009. Passive investors will have

been forced to sell at the end of the year

when Greece dropped out of the benchmark.

Active investors had the ability to reduce their

exposure well in advance of this. Passive

investing ensures that investors will fall into

every pitfall along the way, whereas active

investing allows the manager to help investors

to avoid them.

Efficient Frontier: World Govt Inflation-Linked All Maturities vs iBoxx Dollar Corporates BBB

Source: Datastream and Barclays Capital: 29/12/2000 - 31/12/2010

Best Risk Adjusted Return

100% World Govt

Inflation-Linked

All Maturities

Minimum Risk Portfolio

100% US Govt Inflation-Linked All Maturities

6.0

6.5

7.0

7.5

8.0

8.5

6.5 7.0 7.5 8.0 8.5 9.0

Re

turn

%

Risk%


Holding a global portfolio of course introduces

exposure to the inflation rates of other

countries, and therefore a mismatch in returns.

However, in a diversified global portfolio, so

long as the currency exposure is hedged back

to the domestic currency, the mismatch should

be small over time.

This relies on the concept that countries with

higher inflation tend to have higher interest

rates. This will mean that over the cycle the

carry on the foreign exchange hedge will offset

the inflation mismatch.

For example, an investor in a higher inflation,

higher interest rate economy buys inflation-linked

bonds in a lower inflation, lower interest rate

economy. The bonds will provide insufficient uplift

to match his domestic inflation, but the interest

rate differential will mean there is a positive carry

on the foreign exchange hedge, and these two

should, over the medium term, net out.

These relationships are not perfect and do not

work instantaneously, but a well diversified,

hedged global portfolio of inflation-linked

bonds should, over the medium term, be an

effective domestic inflation-linked asset.

Managing Currency Risk in a Global Inflation Portfolio


A global market in government inflation-linked

bonds has only really existed since around

the turn of the millennium. The UK was the

first major issuer in 1981, and for some time

it was a small corner of the world markets,

present in just the UK, Canada and Australia.

When the US launched its Treasury Inflation

Protected Securities (TIPS) program in 1997,

the global market began to emerge. Euro-zone

issuers followed, with France issuing bonds

indexed both to French inflation (OATi) and

Euro-zone inflation (OATei), and Italy, Greece

and eventually Germany following in Euro-

zone-linked bonds. Japan completed the list

of G7 issuers in 2004, and Sweden is also a

large enough issuer to gain entry to market

benchmark indices.

The chart below shows the growth in the

market value over time, showing that recent

years have seen a massive increase in both

supply and demand.

The TIPS market has, unsurprisingly, surpassed

all others in terms of size, representing 39%

of the Barclays Global Inflation-Linked Index.

The Euro-zone has grown to 19% of bonds

outstanding. Australia returned to issuance in

the autumn of 2009, with a A$4bn issue (the

largest bond issue in Australia ever).

Barclays Global Index – Inflation-Linked Bonds Market Value ($bn)

Source: Barclays Capital. Data as at 31 March 2011.

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US UK Sweden Japan Italy Germany France Canada Australia

A brief History of Inflation-Linked Markets


Other issuers

Many other countries issue inflation-linked

bonds, but are too small a size or too poor

a credit rating to enter mainstream indices.

Many countries at one stage could only issue

in inflation-linked bonds, as investors would

not buy nominal assets of countries with weak

currencies and persistent high inflation. Brazil

is the prime example of this, and represents

a large proportion of the emerging market

inflation-linked index.

Brazil has a long history in government

inflation-linked bonds, its first issue dating

back to 1964. It is the largest emerging market

issuer with over $130bn market value.

EM Inflation-Linked Bonds Market Value ($bn)

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1996 1998 2000 2002 2004 2006 2008 2010

Israel


Turkey Poland Mexico South Korea Colombia Brazil Argentina Chile South Africa

Inflation-Linked Bonds Outstanding by Market Value ($bn)

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Party A Party B

Inflation

Fixed Rate

As the size and sophistication of the global

inflation market has expanded, a range of

inflation derivative products has arrived to

broaden the opportunity set further. The

market for inflation swaps offers investors an

alternative means of expressing their views

on inflation.

In each region, the inflation swap market uses

the index to which domestic bond markets are

linked. The most common structure of inflation

There are active inflation swap markets in the

UK, US, Euro-zone, France, Australia and Japan.

There are also less developed markets in

Sweden and Canada but activity is very light.

The inflation swap market and inflation-linked

bond markets often interact via asset swap

activity (whereby an investor can pay inflation-

linked bond cashflows to a counterparty in

exchange for LIBOR flows). The more active

swap markets also have their own liquidity.

Supply tends to come from corporate bond

issuance, structured medium-term notes or

retail savings products linked to inflation.

Demand comes from pension funds (especially

in the UK and a growing theme in Europe), real

money and leveraged investors.

swap traded is a zero coupon swap, where

there is just one cashflow in each direction

at maturity. In the example below, Party B

pays a fixed amount, agreed at inception, and

receives an amount linked to the growth in the

relevant inflation index over the life of the swap.

Therefore, if the price level rises by more than

the fixed amount, party B makes a profit on the

swap. The value of the swap at any given point in

its life is determined by movements in inflation

expectations since the inception of the trade.

The zero coupon nature of inflation swaps

makes it an efficient way of implementing a

view or hedging an exposure on a particular

part of the curve without worrying about any

cashflows prior to maturity that can be an issue

when using bonds.

Inflation swaps are now used by a wide variety of

investors, for matching and hedging purposes,

as well as in conjunction with bond markets to

create more efficient portfolios. It should be noted

though that a long term inflation swap does not

guarantee a cashflow; if one’s swap counterparty

ceases to exist, so does the swap. Swaps are

collateralized (typically daily) such that the current

market value of a swap is protected, but the actual

pay-out should not be seen as equivalent in risk to

a government bond.

The Role of Inflation Swaps


Major issuers and their corresponding indices are shown in the table below:

Key global inflation indicesCountry Issue Issuer Inflation index

United States

Treasury Inflation- Protected Securities (TIPS)

US Treasury

US Consumer Price Index (NSA)

United Kingdom Inflation-linked Gilt UK Debt Management Office

Retail Price Index

Japan JGBi Ministry of Finance Japan CPI

Germany

Bund index and BO index

Bundesrepublik Deutschland Finanzagentur

EU HICP ex Tobacco

France OATi and OATei

Agence France Tresor France CPI ex-tobacco (OATi), EU HICP (OATei)

Canada Real Return Bond Bank of Canada Canada All-items CPI

Australia Capital Indexed Bonds Department of the Treasury (Australia)

ACPI

Sweden Index-linked treasury bonds

Swedish National Debt Office

Swedish CPI

Italy BTP€i Department of the Treasury

EU HICP ex Tobacco

Key Global Inflation Indices


Looking Ahead

The growth of the market is set to continue

across many countries:

¬ The investment grade market has grown from

$1454 billion at the end of 2009 to $1703

billion at the end of Q1 2011. There has

been new issuance from all countries in the

benchmark index except Japan, where the

Ministry of Finance continues to buy back

existing bonds.

¬ The US TIPS market has increased

significantly in size (from $563 billion at the

end of 2009 to $677 billion at the end of Q1

2011) and maturity.

¬ The UK RPI-linked market increased from

$341 billion at the end of 2009 to $406

billion at the end of Q1 2011, primarily

driven by very long-dated bonds sought

after by pension funds. In addition, there

are expectations for a CPI market to develop

over the next few years after the Secretary

of State for pensions announced in July 2010

that UK pension indexation will switch to

CPI from RPI.

¬ Since 2009, the Australian market has almost

doubled in size, from $10.5 billion to $19.1

billion at end of Q1 2011. The longest maturity

has increased from 2025 to 2030. New Zealand

is expected to re-enter the market in 2011

although timing remains uncertain.

¬ European issuance has also grown, across

Germany, France and Italy, from $394 billion

at the end of 2009 to $457 billion at the end

of Q1 2011. Germany is expected to expand

the maturity range of its bonds in the near

future by issuing a 30-year bond, and there

are ongoing rumours of issuance in the

pipeline from Ireland and Spain, although

this may be subject to prevailing sentiment

in peripheral European bond markets.

¬ Inflation continues to be a highly important

topic in emerging markets and the stock of

inflation-linked bonds has grown rapidly. The

Brazilian, Mexican and Polish markets have

all increased in nominal size by over 70%

since the end of 2009 (equating to nominal

growth of $97 billion, $21 billion and $3

billion respectively).


Contact Details

For more information, please contact a member

of our team.

Visit us online

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Michael De VereInvestment Director - Asia

Tel +82 (0) 2 3782 4765

[email protected]

David PengInvestment Director

Head of Business Development - China, Taiwan, Hong Kong

Tel +852 9388 5285

[email protected]

Hong JiChief Representative

Beijing

Tel +86 10 84193401

[email protected]


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An Investor’s Guide to Inflation-Linked Bonds

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Transcript of An Investor’s Guide to Inflation-Linked Bonds