This is a product I've been waiting for since I first got wind of it at the end of 2008 and I reckon it could be a really nice addition to any retail investors portfolio.
The product gets officially announced on Monday but basically Rand Merchant Bank and their "Bips" team have created an ETF product comprising four government-issued Inflation-Linked Bonds. Basically your real return on the proudct is inflation + 2.5%.
The reason this product is really interesting is that if you buy into the theory that the bailouts have created "un-natural" liquidity in the system, we're about to have a huge second bout of inflation hit the global economy.
When that comes in, many of your other investments will fail to grow or keep pace with inflation and this is one of the few "guaranteed" (I hate that word) ways in which you can continue to generate a positive return.
To me it is a "must-have" in your portfolio going forward and I'm definately going to be adding a few. The IPO for the product is next week and it will be listed on the 15th of May.
Just a thought - use it don't use it.
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