What is the job?
Ballast, liability matching, income, or tactical rate view are different jobs and should not be mixed together.
Research snapshot
Last reviewed
23 April 2026
Who this is for
UK investors deciding whether a bond sleeve should be broad global ballast, a gilt allocation, or something else entirely.
Default answer
Start with the job of the bond sleeve, then compare duration and hedging only within that job.
Main risk
Buying bond funds for yield while ignoring duration or currency behaviour that matters more to the portfolio.
The three questions that matter
Question 2
How much duration?
Higher duration usually means more sensitivity to rate changes. That can be useful or painful depending on the role of the sleeve.
Question 3
Should it be hedged?
For UK investors using bonds as ballast, sterling-hedged global aggregate funds often make more sense than leaving the currency swing unexamined.
Practical routes
| If the job is... | Likely route | Professional read |
|---|---|---|
| Broad diversified ballast | AGGU / VAGP | Usually cleaner for a sterling-based investor than unhedged global bond exposure. |
| Specific UK gilt sleeve | VGOV | Useful when the plan calls for gilts specifically, not when you really want broad bond diversification. |
| Income replacement | Usually not the first bond-ETF question | Start with the spending plan. Bond yield alone is not a complete portfolio answer. |
Common mistake: treating bond ETFs as if they are all just "safer assets". Duration, credit mix, and hedging can change the portfolio behaviour a lot more than the label suggests.
Best next pages
Portfolio
Use the ETF builder
See what the bond sleeve actually does to weighted volatility, drawdown, and yield.
Compare
Read the best bond ETF page
Use the shortlist page when you are down to a small number of broad ballast options.
Drawdown
See the drawdown lens
Bond sleeves make more sense when they are tied back to a spending plan rather than viewed in isolation.