Cirilium Adds Index-Linked Gilts Amid Rising UK Inflation Concerns

Quilter's investment platform Cirilium has introduced index-linked gilts as a dedicated asset class in its portfolios, following an optimization of its strategic asset allocation (SAA). The move aims to enhance diversification and mitigate inflation risk.

The Cirilium Conservative portfolios have been allocated approximately 5% exposure to the Vanguard Inflation-Linked Gilt Index Fund. This allocation will scale down for higher-risk profiles as fixed income exposure decreases.

Ian Jensen-Humphreys, portfolio manager of Quilter's Cirilium portfolios, believes that 'this feels like a very pertinent time to be adding index-linked gilts to the portfolios.' He notes that bonds usually perform well in growth shocks but lose diversification benefits when inflation rises, reducing future income received.