In recent months we have been buying 0-5 year US inflation-linked bonds (TIPS) as a defensive move to get exposure to the US dollar.



At the time of purchase, we viewed the US bond market as still offering little value against a background of further monetary tightening by the Federeal Reserve.

In addition, we felt that the market was being complacent in terms of what was being discounted for future inflation. The break-even rate of inflation, nominal yields minus real yields on TIPS, was pricing future US inflation at a little over 2% – i.e. the Fed’s target rate.

With the US economy re-accelerating from the Q1 slowdown, as well as an increasingly tight labour market and additional economic fuel from tax cuts, we anticipate US inflation to peak nearer to 2.75% than the 2% target. This suggested to us at the time that there would be further upside for US yields as the Fed continues to raise short-term interest rates to 3% from the current 1.75%.

In summary, our investment in short-dated TIPS was gaining dollar exposure with some inflation protection.

Click here to read the full article on Investment Week

Terms & Conditions


By using or accessing any part of our website, aside from the Terms and Conditions page, you agree to be legally bound by those terms and conditions. We may amend these terms and conditions at any time without notice. Your continued use of our website following any change will constitute your acceptance of such change. Our full terms and conditions can be found here.

Regulatory Information

The MitonOptimal Group (“MitonOptimal”) of companies is authorised and regulated in their respective jurisdictions, as required by law. For further details, you may visit the regional sites via

MitonOptimal UK Ltd (including Coram, the trading name of the funds’ division) is part of the MitonOptimal group of companies. MitonOptimal UK Ltd is registered in England and Wales No. 09138865. Authorised and regulated by the Financial Conduct Authority.

Risk Warning

Potential investors should be aware that our models and funds may make investments in equities, bonds, cash, commodities alternative strategies and commercial property. Investors should be aware that there is no guarantee that investments will go up.  Past performance is no guide as to future performance. As the price of units and the amount of income distributed or accumulated may go down as well as up, the Manager has no obligation to redeem units at the subscription price originally paid. If you are in any doubt about the contents of these terms and conditions, you should not enter the site and consult your stockbroker, bank manager, solicitor, accountant or professional investment advisors.

If you have any questions or concerns about our website please email us at [email protected].

Please indicate below, whether you accept/do not accept our terms and conditions of use.


MitonOptimal UK Limited
Royal Mead
Railway Place


t: +44 (0) 1225 632 250
f: +44 (0) 1225 439 442

Regulatory Information

MitonOptimal UK Limited is part of the MitonOptimal group of companies. Registered in England and Wales No. 09138865. Authorised and regulated by the Financial Conduct Authority.