Analysis for investment attractiveness of indexed bonds using Indexed Federal Loan Bonds (OFZ-IN) as an example

Abstract

In conditions of increased inflationary uncertainty, indexed bonds, such as Indexed Federal Loan Bonds (OFZ-IN), are becoming a key tool for protecting purchasing power of savings. The purpose of this study is to conduct a comprehensive analysis of the investment attractiveness of Indexed Federal Loan Bonds (OFZ-IN) and develop practical recommendations for private and institutional investors. The paper uses methods of analyzing secondary data, discounting cash flows in real and nominal terms, as well as scenario analysis of profitability for a five-year horizon at various levels of inflation (from 4% to 7% per annum). The information base was compiled by the data from the Moscow Stock Exchange, the Bank of Russia and the Ministry of Finance of the Russian Federation. The results show that Indexed Federal Loan Bonds (OFZ-IN) provide stable real returns of about 2,5% per annum, regardless of the inflationary scenario, effectively hedging inflationary risks. At the same time, their nominal profitability directly de-pends on actual inflation, which makes them especially attractive during the periods of macroeconomic instability. It is recommended to include Indexed Federal Loan Bonds (OFZ-IN) in a diversified portfolio with a share of 20–30%. The findings of the study can be used by investors in the formation of long-term strategies, as well as regulators to improve debt policy. A promising area of further research is the analysis for the impact of liquidity and transaction costs on the final profitability of the instrument.