Quote Originally Posted by huxley View Post
Some of the Perpetuals listed out there present and opportunity to capture value if interest rates rise eg the IFT bonds linked to the one year swap rate + a margin of 1.5%pa.. looks like they're currently priced to pay around 5.5% If you think short term rates have bottomed out you could gain on any upside in the future..

I mention this as anyone thinking of constructing a bond portfolio may want to balance out their fixed interest positions with something like these instruments...

Any thoughts?
That's pretty much how I use IFTHA. An inflation hedge. You buy 'em cheap, which gives an acceptable return, but if rates rise, the coupon rate rises too.

The "buy 'em cheap" part is important. I'd hate to be one of the poor b*ggers who went into these at time of issue.