What strategies can investors take to out-invest inflation?

With the Bank of England[i] predicting UK inflation will rise to 10% by the end of the year before going down again next year, CAMRADATA’s latest whitepaper on Inflation Protection Strategies explores innovative ways investors can manage the impact of inflationary highs and lows on their portfolios.

This latest whitepaper offers insights from firms including Downing, Waverton, Capita, Law Debenture and Pool Re who attended a roundtable hosted by CAMRADATA in London in May.

The report looks at the short-term drivers of inflation, and how they might impact responsibilities and investment allocation decisions, before discussing the challenges facing DB and DC pension schemes seeking returns.  It also explores whether traditional methods of combating inflation are still fit for purpose, as well as the outlook for the future, and in particular the link between sustainability and inflation.

Natasha Silva, Managing Director, Client Relations, CAMRADATA said, “After years of central banks fighting to lift inflation towards their relatively low targets, these same institutions are now trying to address a global cost of living rate that has not surged so quickly in decades.

“Whether rising inflation is temporary or not, it can dramatically impact an institutional investment portfolio and a short-term hit can still be felt years later. Yet, hedging this unrewarded risk can cost precious and substantial assets, and trying to out-invest inflation through traditional assets is a strategy few would choose.

“Increasingly there are options open to investors. Private assets and strategies once termed “alternative” may provide the tools investors need to beat this upshifting inflation rate. Our panel shares insights on these and considers whether investors are ready, and willing to take the plunge.”

To read the Inflation Protection Strategies whitepaper, please click here.

For more information on CAMRADATA visit www.camradata.com

[i] https://www.bankofengland.co.uk/knowledgebank/will-inflation-in-the-uk-keep-rising