Inflation-linked gilts for a future UK resident

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Fissure
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Inflation-linked gilts for a future UK resident

Post by Fissure »

Hello, I have created a new account to ask for your opinion on a matter.

I live in a European country (it is not relevant which one), and I will be moving to the United Kingdom in a few years. My savings are in euros.

One thing that worries me is that the price of the pound sterling will rise against the euro, and my savings will lose purchasing power before I leave my country. With this in mind, I have thought about allocating part of my portfolio to buying an inflation-linked gilts ETF, such as this one: https://www.justetf.com/en/etf-profile. ... 00B1FZSD53

My reasoning is as follows:
  • Inflation-linked gilts performed well coinciding with the rise of the pound sterling against the euro (2009-2015)
  • Inflation-linked gilts fell by 38% in 2022, so the current price is low
To this, one could respond that what happened between 2009 and 2015 does not necessarily have to happen again, and that they could continue to fall. I understand this reasoning, but there is also risk in other products.

With this in mind, I had thought of a conservative portfolio of this type:

35% inflation-linked gilts
55% Certificate of deposit (I don't like European and global bonds)
10% Gold

What is your opinion?
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