“At the date of issue, RRBs have a nominal coupon rate plus a base value of the consumer price index. Thereafter, both the principal and the coupon are indexed according to the CPI. The effect is that both the principal and interest pay in constant dollars (as defined by CPI indexing), thus providing protection from future inflation. Because the inflation indexing of the capital results in deemed income from individual bonds with no cash immediately received, they should be held in tax sheltered accounts.”

You can buy the bonds directly, or you can buy an ETF that holds a portfolio of such bonds. iShares has one (XRB) as does BMO (ZBB) for Canadian bonds. The XRB chart, shown below, suggests that RRB’s broke out of a range in 2020, and have entered into another trading range. Current price is in the middle of the range, which isn’t a terrible place to buy. A breakout through $27 would be bullish. A pullback to $25 might represent a place to add to positions.  Obviously, the risk of these bonds lies in the potential for inflation to trend substantially lower over the time you hold them – a possibility if you believe in the integrity of  your local government’s inflation statements. You know where I stand on that.