Don’t bear the brunt of inflation
As data from FE Analytics shows that 52 percent of absolute return funds failed to beat inflation, it proves how hard it can be to find investments which are truly inflation-proof.
Therefore, perhaps unsurprisingly, there was significant interest from investors when National Savings and Investments (NS&I) relaunched its Index-linked Savings Certificates, which promise to pay 0.5 percent above inflation on the retail prices index.
One particular benefit of these certificates is the ability to cash them in after a year with no loss of index-linking. Therefore, investors are provided with a safety net should inflation drop substantially in the next couple of years.
While sales have now dropped after the initial peak, many investors will remember that NS&I was forced to withdraw the certificates in July 2010 to ensure that it stayed within the net financing target set for it by the Treasury.
However, as the organisation was given a more generous financing target in the last Budget, it has been able to reintroduce the certificates, which should be available for “a sustained period” – although this does depend on whether there is another spike in demand.
