Inflation is a growing concern for many investors, particularly in Singapore, where the cost of living has been steadily increasing. From rising property prices to higher expenses on essential goods like food and transportation, inflation is eroding purchasing power across the country. As investors search for reliable ways to protect their wealth, inflation-protected bonds (IPBs) have emerged as a potential hedge against rising costs. But do these bonds truly offer the protection investors expect in the context of Singapore’s economic environment? Let’s explore this in more detail.

Understanding Inflation-Protected Bonds

Inflation-protected bonds are a unique type of fixed-income investment designed to help investors preserve their purchasing power during periods of inflation. These bonds are structured to adjust their principal and interest payments based on changes in inflation rates, typically using a government-backed inflation index such as the Consumer Price Index (CPI).

How Inflation-Protected Bonds Work

The main feature of inflation-protected … Read More