For institutional investors in the UK

Still Think High Inflation is Transitory?

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Suny Park, CFA, CPA

Suny Park, CFA, CPA

Head of Institutional Client Strategy, North America


17 Nov 2021

Key takeaways:

Suny Park, Head of Institutional Client Strategy, explores inflation-hedging assets institutional investors may consider in preparation for the end of the Great Moderation.

Key Takeaways

  • The Great Moderation – a period of subdued inflation and business cycle volatility as we know it – may be coming to an end.
  • As witnessed during the early and the late 1970s, high inflation can wreak havoc on both equities and bonds. Unfortunately, most institutional portfolios, as currently structured, are not positioned to weather coincident losses in stocks and bonds due to high inflation.
  • Our research indicates, inflation-hedging assets or strategies such as REITs, natural resources, and trend-following strategies may provide portfolio protection should the current bout of high inflation persist well into 2022.

These are the views of the author at the time of publication and may differ from the views of other individuals/teams at Janus Henderson Investors. Any securities, funds, sectors and indices mentioned within this article do not constitute or form part of any offer or solicitation to buy or sell them.

 

Past performance does not predict future returns. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested.

 

The information in this article does not qualify as an investment recommendation.

 

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