GILI
iShares Global Inflation Linked Govt Bond UCITS ETF USD (Acc)
Published by Radif Partners · Updated
Overview
iShares Global Inflation Linked Govt Bond UCITS ETF USD (Acc) (GILI) tracks the Bloomberg World Govt Inflation-Linked Bond index and holds its constituents directly, a physical replication managed by iShares. Dividends are reinvested inside the fund rather than paid out, so GILI suits investors building a position over time. The fund is domiciled in IE, which determines the withholding tax treatment applied to its dividends. Annual charges come to 0.20% of assets, and the fund holds 220M under management. Over five years the fund returned -9.7% a year on average, against 0.3% over three years. It is not eligible for the French PEA, but can be held in a securities account, a UK ISA or a German Depot. Its risk level is rated medium. Launched on 2009-11-12, the fund is denominated in USD and has 17 years of track record. It is a UCITS fund, so it follows the European framework on diversification, liquidity and asset segregation. Because GILI accumulates, nothing is taxed while the shares are held: the charge falls on disposal, against your capital gains allowance in a general account, and not at all inside an ISA or a SIPP. Domicile in IE sets the withholding the fund itself suffers on the dividends it receives, a cost absent from the stated fee but present in the return.
At 0.20%, this fund costs more than twice the median of its category (0.10%) and over 6.7 times the cheapest (0.03%). On £10,000 the gap to the median is worth about 100 over ten years, and that difference is certain in a way no performance gap is. A premium can be justified, by an index no competitor tracks, by a useful trading currency, or by size that guarantees liquidity; it is not justified by the brand. The question is therefore plain: what does this fund offer that the cheapest on the list does not?
Replication is physical: the fund actually holds the constituents of Bloomberg World Govt Inflation-Linked Bond, which makes its contents verifiable line by line in the issuer's report. Two points deserve attention. Securities lending first, practised by most physical funds to reduce costs: it earns a few hundredths of a point and creates an exposure to the borrower, covered by collateral, with the annual report stating the proportion lent. Rebalancing second: every change in the index's composition forces the fund to buy and sell, and those internal costs are not in the 0.20% headline. That is why two funds at the same price do not track their index with the same fidelity.
The domicile, Ireland, is not an administrative detail: it determines the withholding tax the fund suffers on the dividends it receives, and that loss appears in no fee table. On US equities, the Ireland-US treaty cuts withholding from thirty to fifteen per cent, which on a world index is mechanically worth several tenths of a point a year and explains Irish dominance of this segment. For the holder, the UCITS framework also brings the key information document in their own language, diversification rules, and separation of the fund's assets from the issuer's.
Income is accumulated: dividends from the holdings are reinvested inside the fund rather than paid out. In a taxable account that defers taxation to the moment of sale instead of triggering it annually, leaving the whole return at work, and that is the main advantage of this share class. Two qualifications go with it. A holder who needs income has to sell units to obtain it, which is one more decision to take and sometimes at a bad moment. And the deferral is not universal: some countries tax a notional annual return whatever the distribution policy, in which case the accumulating class changes nothing.
With 220 million in assets and 17 years of history, this fund has the size and the record that make closure unlikely and the spread narrow. Three checks remain, once a year, none of which depends on the market. The ongoing charge, which an issuer revises without notice and whose gap to a competitor can invert. The tracking difference, the only figure that says whether replication stays faithful. And the methodology of Bloomberg World Govt Inflation-Linked Bond, which can change its selection or weighting rules without the fund's name moving, in which case what you hold has changed with nothing to announce it.
Bloomberg World Govt Inflation-Linked Bond tracks government debt, and the price driver is not a company's profit but the interest rate: when rates rise, the value of bonds already issued falls, the more so the further away their maturity. What matters on this fund is therefore not past return but duration, which says how much the value moves per point of rate, and yield to maturity, which says what the portfolio earns if nothing is sold. Default risk is secondary here; interest rate risk is the substance.
Over one year the fund shows -0.6% against -9.7% annualised over five years: the recent year sits well above the long average. A gap in that direction mainly counsels care about the entry point, since what has risen sharply lately costs more today than a year ago, and the long average is the figure that best describes what to expect.
0.20%
220M
220M USDMedium
6,930
Physical
Accumulating
USD
IE
Bloomberg World Govt Inflation-Linked Bond
iShares
2009-11-12 (16 years)
Contextual Analysis
Fund Size
With 220M in assets, this is a mid-sized fund, decent liquidity for most investors.
Fee Positioning
A TER of 0.20% is in line with the market average (~0.35%).
Track Record
Launched in 2009-11-12, this fund has 16 years of history, long and reliable track record.
Risk Profile
Medium risk, good risk/return balance for a 5+ year horizon.
Performance
Returns Summary
| Period | Ann. Return | Cumulative |
|---|---|---|
| 1 Month (est.) | – | -0.1% |
| 3 Months (est.) | – | -0.2% |
| 6 Months (est.) | – | -0.3% |
| YTD (est.) | – | -0.3% |
| 1 Year | -0.6% | -0.6% |
| 3 Years | +0.3% | +0.8% |
| 5 Years | -9.7% | -39.8% |
| Since inception (16y) | -3.3% | -41.9% |
Key Facts
Fund Profile
Themes & Zones
Holdings
Risk
How to Buy This ETF
Select your country in the menu to see available brokers and wrappers.
About this ETF
The iShares Global Inflation Linked Govt Bond UCITS ETF USD (Acc) tracks the Bloomberg World Govt Inflation-Linked Bond index. It is managed by iShares using physical replication and follows a accumulating distribution policy. The fund is denominated in USD and domiciled in IE. It has a total expense ratio (TER) of 0.20%.
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Frequently asked questions
What do GILI's 0.20% charges actually cost?
They are taken from the fund's value continuously and never billed separately: on £1,000 invested that is about £2.00 a year and roughly £20 over ten years at a constant amount. That is the only cost of the fund itself. Your broker's commission and the spread between buying and selling price come on top, and they weigh most on small frequent purchases.
Does GILI pay dividends?
No: the fund accumulates, reinvesting the dividends of the companies it holds so that the unit price rises instead. In a taxable account that defers tax to the sale rather than triggering it annually. Anyone needing regular income has to sell units to obtain it, or choose a distributing class on the same index where one exists.
What happens if GILI closes?
At 220 million in assets, this fund is small enough for a merger or a wind-up to be a real prospect. On liquidation the holdings are sold and the proceeds paid to you on a date you did not choose, so with a gain that may be taxable at the wrong moment. On a merger your units move to another fund whose index is not quite the one you picked.
What is the real risk in GILI?
Interest rates, not default. When rates rise, the value of bonds already issued falls, and the size of the move depends on the portfolio's duration: roughly one per cent per year of duration per point of rate. The figures to look at on this fund are therefore duration and yield to maturity, which says what the portfolio earns if nothing is sold. Neither appears in an annual return.
How do you buy GILI, and on which venue?
Through any broker that lists ISIN IE00B3B8PX14. The same strategy often exists in several share classes with different fees and distribution policies, and what counts is the class you buy rather than the one you read about: check the ISIN, not the name. A limit order avoids paying the spread of a thin order book, particularly outside the trading hours of the underlying markets.
This ranking is for informational purposes only and does not constitute a recommendation to buy or sell any security. Displayed performance is simulated.