Index-Linked Bond

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Dictionary Says

Definition of 'Index-Linked Bond'

A bond in which payment of income on the principal is related to a specific price index - often the Consumer Price Index. This feature provides protection to investors by shielding them from changes in the underlying index. The bond's cash flows are adjusted to ensure that the holder of the bond receives a known real rate of return.

In Canada, they also referred to as "real return bonds."
Investopedia Says

Investopedia explains 'Index-Linked Bond'

This type of bond is valuable to investors because the real value of the bond is known from purchase and the risk involved with uncertainty is eliminated. These bonds are also less volatile than nominal bonds and they help investors to maintain their purchasing power. For example, assume that you purchase a regular bond with a nominal return of 4%. If inflation is 3%, you will actually only receive 1% in real terms. On the other hand, if you buy an index-linked bond your cash flow will be adjusted to changes in inflation and you will still receive the full 4% in returns.
Search results for

'Index-Linked Bond'

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    ... Equity Index CDs have also been known as "market indexed CDs," or "index-linked
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  • 5 Inflation-Beating Bond Picks

    http://www.investopedia.com/articles/bonds/09/fixed-income-investing-inflationary-environment.asp
    ... pays a stated rate of interest, and a Consumer Price Index-linked element that adjusts
    the principal value of the bond up or down with changes in the index. ...

  • How Your Annuity Company Determines Renewal Rates

    http://www.investopedia.com/articles/pf/07/renewal-rates.asp
    ... Maturity Generally, the longer a bond's maturity, the higher the yield. ... The portfolio
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  • Introduction To Inflation-Protected Securities

    http://www.investopedia.com/articles/04/091504.asp
    ... would have to average more than 4% over the life of the bond for the IPS ... of developed
    markets issue an IPS (for example, TIPS in the US; Index-Linked Gilts in ...

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