Special Report: Inflation-linked bonds - Domestic versus global.

When the inflation-indexed bond markets were first created, the majority of investors held portfolios that contained only domestic inflation-indexed bonds denominated in their own currency and their own inflation. But over the last 10 years or so, the inflation-indexed bond market has evolved into a global market with the number of issuing countries increasing from three to 10, the global supply increasing from $100bn to about $550bn today (and estimated to be over $800bn by the end of 2005).

We now have inflation-indexed bonds denominated in all regions and major curr