Indexation

This term is most commonly used to describe the linking of a variable to the inflation rate. Some governments link benefits to inflation, and others link prices such as rail fares to the same measure. Several governments have issued government bonds of which the coupon and repayment value rise in line with inflation; these are known as index-linked bonds. Indexation also refers to a field of fund management that attempts to replicate the performance of a stock-market index; see passive management.